6174 Terrace Dr #13

Johnston, IA 50131

$209,000D

2 bd · 1.5 ba · 1,501 sqft · Built 1980 · Condo · Pending · 116 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,660/mo
• Mortgage (P&I): −$1,096
• Tax + insurance: −$327
• HOA: −$275
• Vac / Maint / Mgmt: −$349
• Net cashflow: $-387/mo
• Annual: $-4,640/yr
• Cap rate: 4.07%
• Cash-on-cash: -7.93%
• DSCR: 0.65
• 1% rule: 0.79%
• Cash to close: $58,520

Investor read

• This is a 2-bed/1.5-bath condo listed at $209k.
• At list price, monthly cash flow is $-387 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $141k (32.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $166k (20.6% below list).
• It's been on market 116 days — a 9% lower offer ($190k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $141k (32.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#59 in IA, #1,344 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, employment A+; Watch: amenities F, commute F.
• Johnston Community School District (suburban): math 78% / reading 78% proficiency, ranked #24 of 289 in IA (top 8%) — strong family-tenant draw, lease renewals of 3-5y typical; only 14% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+1.5%/yr); 376 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 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.
• 3 sale attempts; this cycle's ask has dropped $20k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 4.1% vs local median 2.4% in Johnston — 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?
• It's been on market 116 days. Have you received any prior offers? Is the seller open to a 33% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?