407 S Adams St

Mount Pleasant, IA 52641

$119,000C-

3 bd · 2.0 ba · 1,915 sqft · Built 1900 · SingleFamily · Active · 45 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,110/mo
• Mortgage (P&I): −$624
• Tax + insurance: −$207
• HOA: −$0
• Vac / Maint / Mgmt: −$233
• Net cashflow: $46/mo
• Annual: $555/yr
• Cap rate: 6.76%
• Cash-on-cash: 1.67%
• DSCR: 1.07
• 1% rule: 0.93%
• Cash to close: $33,320

Investor read

• This is a 3-bed/2.0-bath single-family listed at $119k.
• At list price, monthly cash flow is $46 ($555/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $111k (6.7% below list).
• It's been on market 45 days — a 3% lower offer ($115k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $111k (6.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $823 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#20 in IA, #662 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: commute F.
• Mount Pleasant Community School District (town): math 63% / reading 66% proficiency, ranked #207 of 289 in IA (top 72%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lincoln Elementary School (math 67% / reading 67%, grade B+, #273 of 616 statewide, top 51%, 211 students, 50% FRL); Mount Pleasant Middle School (math 64% / reading 70%, grade A-, #140 of 246 statewide, top 60%, 406 students, 49% FRL); Mount Pleasant High School (math 65% / reading 67%, grade B, #200 of 336 statewide, top 60%, 582 students, 45% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 93 active listings in the ZIP; 30 units permitted in Henry County in 2024 (8 in 5+ unit buildings).
• Henry County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Cap rate 6.8% vs local median 3.3% in Mount Pleasant — 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

• It's been on market 45 days. Have you received any prior offers? Is the seller open to a 7% concession, seller financing, or rate buy-down credit?
• 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 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.
• 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.