502 E 12th St S

Newton, IA 50208

$189,900D

4 bd · 2.0 ba · 1,440 sqft · Built 1976 · MultiFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,628/mo
• Mortgage (P&I): −$996
• Tax + insurance: −$304
• HOA: −$0
• Vac / Maint / Mgmt: −$342
• Net cashflow: $-14/mo
• Annual: $-162/yr
• Cap rate: 6.21%
• Cash-on-cash: -0.31%
• DSCR: 0.99
• 1% rule: 0.86%
• Cash to close: $53,172

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $190k.
• At list price, monthly cash flow is $-14 ($-162/yr) — negative. Per door: $-7/mo.
• To cash-flow at today's rent, offer at most $188k (1.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $163k (14.3% below list).
• It's been on market 48 days — a 3% lower offer ($184k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (14.3% below list) — sets the bar for 1% rule.
• 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 77/100 on livability (#169 in IA, #3,069 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, employment D+, amenities F.
• Newton Community School District (town): math 59% / reading 62% proficiency, ranked #245 of 289 in IA (top 85%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 242 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 16 units permitted in Jasper County in 2024 (0 in 5+ unit buildings).
• Jasper County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Cap rate 6.2% vs local median 3.1% in Newton — 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.
• This rent runs 31% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 48 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1976 — 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?