439 Peterson St

Iowa City, IA 52245

$149,900D

2 bd · 2.0 ba · 1,026 sqft · Built 1972 · Condo · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,595/mo
• Mortgage (P&I): −$786
• Tax + insurance: −$339
• HOA: −$300
• Vac / Maint / Mgmt: −$335
• Net cashflow: $-165/mo
• Annual: $-1,983/yr
• Cap rate: 5.41%
• Cash-on-cash: -3.14%
• DSCR: 0.86
• 1% rule: 1.06%
• Cash to close: $41,972

Investor read

• This is a 2-bed/2.0-bath condo listed at $150k.
• At list price, monthly cash flow is $-165 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $121k (19.5% below list).
• Meets the 1% rule at list price ($2k rent vs $150k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $121k (19.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 86/100 on livability (#13 in IA, #450 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+.
• Iowa City Community School District (urban): math 65% / reading 70% proficiency, ranked #174 of 289 in IA (top 60%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Robert Lucas Elementary School (math 52% / reading 57%, grade C, #462 of 616 statewide, top 79%, 285 students, 44% FRL); Southeast Junior High School (math 64% / reading 68%, grade A-, #152 of 246 statewide, top 62%, 812 students, 50% FRL); Iowa City High School (math 62% / reading 73%, grade B, #186 of 336 statewide, top 57%, 1,599 students, 40% FRL).
• Watch-outs: flood insurance adds $56/mo.
• Market conditions: Rents rising fast (+6.0%/yr); 204 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 714 units permitted in Johnson County in 2024 (158 in 5+ unit buildings).
• Johnson County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 10y 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 $126k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 2.7% in Iowa City — 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 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?