401 N Walnut St N

New London, IA 52645

$142,500C-

3 bd · 2.0 ba · 1,724 sqft · Built 1900 · SingleFamily · Active · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,205/mo
• Mortgage (P&I): −$747
• Tax + insurance: −$280
• HOA: −$0
• Vac / Maint / Mgmt: −$253
• Net cashflow: $-75/mo
• Annual: $-895/yr
• Cap rate: 5.66%
• Cash-on-cash: -2.24%
• DSCR: 0.90
• 1% rule: 0.85%
• Cash to close: $39,900

Investor read

• This is a 3-bed/2.0-bath single-family listed at $142k.
• At list price, monthly cash flow is $-75 ($-895/yr) — negative.
• To cash-flow at today's rent, offer at most $129k (9.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (15.4% below list).
• It's been on market 25 days — a 2% lower offer ($140k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (15.4% below list) — sets the bar for 1% rule.
• In year one you build about $4k of equity ($985 loan paydown + $4k appreciation (2.5% local appreciation)).
• Location reads 76/100 on livability (#188 in IA, #3,417 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• New London Community School District (rural): math 63% / reading 68% proficiency, ranked #194 of 289 in IA (top 67%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Clark Elementary School (math 62% / reading 62%, grade B, #363 of 616 statewide, top 62%, 289 students, 39% FRL); New London Jr-Sr High School (math 63% / reading 72%, grade B, #186 of 336 statewide, top 57%, 303 students, 40% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 30 units permitted in Henry County in 2024 (8 in 5+ unit buildings).
• Henry County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts since 9y ago; this cycle's ask has dropped $8k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $100k; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (2.5% appreciation + 3.0% rent growth), your $40k cash investment doubles in ~8 years — after that, you're playing with house money.
• By year 8, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.