602 S 4th St

Montezuma, IA 50171

$165,000F

3 bd · 1.0 ba · 916 sqft · Built 1953 · SingleFamily · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,015/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$213
• HOA: −$0
• Vac / Maint / Mgmt: −$213
• Net cashflow: $-277/mo
• Annual: $-3,318/yr
• Cap rate: 4.28%
• Cash-on-cash: -7.18%
• DSCR: 0.68
• 1% rule: 0.62%
• Cash to close: $46,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-277 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $116k (29.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $101k (38.5% below list).
• It's been on market 22 days — a 2% lower offer ($163k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $101k (38.5% below list) — sets the bar for 1% rule.
• In year one you build about $18k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 75/100 on livability (#228 in IA, #4,319 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, cost of living A+; Watch: amenities F, commute F, employment F.
• Montezuma Community School District (rural): math 73% / reading 79% proficiency, ranked #55 of 289 in IA (top 19%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 67 active listings in the ZIP; 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $68k; list at $165k implies a 143% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$45k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.3% vs local median 1.5% in Montezuma — 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 1953 — 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.