832 W 1st St

Waterloo, IA 50701

$45,000B

3 bd · 2.5 ba · 1,347 sqft · Built 1908 · MultiFamily · Pending · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,448/mo
• Mortgage (P&I): −$236
• Tax + insurance: −$126
• HOA: −$0
• Vac / Maint / Mgmt: −$304
• Net cashflow: $782/mo
• Annual: $9,385/yr
• Cap rate: 27.15%
• Cash-on-cash: 74.48%
• DSCR: 4.31
• 1% rule: 3.22%
• Cash to close: $12,600

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $45k.
• At list price, monthly cash flow is $782 ($9k/yr) — positive. Per door: $391/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $45k).
• It's been on market 29 days — a 2% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $311 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#74 in IA, #1,589 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment D-.
• Waterloo Community School District (urban): math 50% / reading 54% proficiency, ranked #276 of 289 in IA (top 96%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Irving Elementary School (math 43% / reading 44%, grade F, #560 of 616 statewide, top 91%, 402 students, 92% FRL); West High School (math 55% / reading 63%, grade C+, #273 of 336 statewide, top 81%, 1,652 students, 62% FRL) — zoned schools average 77% FRL vs 58% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: property tax is 2.9% of price; built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.8%/yr); 282 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 54% of comp listings sitting > 30 days — soft ceiling on asking rent; 287 units permitted in Black Hawk County in 2024 (67 in 5+ unit buildings).
• Black Hawk County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 9y ago 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.
• Current owner paid $38k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.8% rent growth), your $13k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 27.1% vs local median 4.2% in Waterloo — 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

• 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 1908 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.