208 SE 3rd St

Grimes, IA 50111

$244,900D+

3 bd · 1.5 ba · 1,571 sqft · Built 1900 · SingleFamily · Pending · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,027/mo
• Mortgage (P&I): −$1,284
• Tax + insurance: −$382
• HOA: −$0
• Vac / Maint / Mgmt: −$426
• Net cashflow: $-64/mo
• Annual: $-774/yr
• Cap rate: 5.98%
• Cash-on-cash: -1.13%
• DSCR: 0.95
• 1% rule: 0.83%
• Cash to close: $68,572

Investor read

• This is a 3-bed/1.5-bath single-family listed at $245k.
• At list price, monthly cash flow is $-64 ($-774/yr) — negative.
• To cash-flow at today's rent, offer at most $234k (4.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $203k (17.2% below list).
• It's been on market 23 days — a 2% lower offer ($241k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $203k (17.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#106 in IA, #2,080 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: amenities F, commute F.
• Dallas Center-Grimes Community School District (rural): math 78% / reading 82% proficiency, ranked #19 of 289 in IA (top 7%) — strong family-tenant draw, lease renewals of 3-5y typical; only 12% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 327 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 2,953 units permitted in Polk County in 2024 (540 in 5+ unit buildings).
• Polk County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.0% vs local median 2.3% in Grimes — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

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 A-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.