409 Lehnen St

Norway, IA 52318

$132,500C-

3 bd · 1.0 ba · 1,075 sqft · Built 1900 · SingleFamily · Active · 307 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,153/mo
• Mortgage (P&I): −$695
• Tax + insurance: −$299
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $-83/mo
• Annual: $-996/yr
• Cap rate: 5.54%
• Cash-on-cash: -2.68%
• DSCR: 0.88
• 1% rule: 0.87%
• Cash to close: $37,100

Investor read

• This is a 3-bed/1.0-bath single-family listed at $132k.
• At list price, monthly cash flow is $-83 ($-996/yr) — negative.
• To cash-flow at today's rent, offer at most $118k (11.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $115k (13.0% below list).
• It's been on market 307 days — a 12% lower offer ($117k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (13.0% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($916 loan paydown + $5k appreciation (4.1% local appreciation)).
• Location reads 73/100 on livability (#286 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools B+; Watch: amenities F, commute F, health & safety F.
• Benton Community School District (rural): math 63% / reading 74% proficiency, ranked #140 of 289 in IA (top 48%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 19% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 4 active listings in the ZIP; 34 units permitted in Benton County in 2024 (0 in 5+ unit buildings).
• Benton County population projected at -13% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts; this cycle's ask has dropped $17k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $97k; 37% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (4.1% appreciation + 3.0% rent growth), your $37k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$34k 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?
• It's been on market 307 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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.