416 Michigan St

Storm Lake, IA 50588

$285,000B-

60 bd · 36.0 ba · 3,894 sqft · Built 1955 · MultiFamily · Active · 222 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,050/mo
• Mortgage (P&I): −$1,495
• Tax + insurance: −$590
• HOA: −$0
• Vac / Maint / Mgmt: −$1,060
• Net cashflow: $1,905/mo
• Annual: $22,864/yr
• Cap rate: 14.32%
• Cash-on-cash: 28.65%
• DSCR: 2.27
• 1% rule: 1.77%
• Cash to close: $79,800

Investor read

• This is a 2×1bd/1ba + 4×2bd/1ba units multifamily listed at $285k.
• At list price, monthly cash flow is $2k ($23k/yr) — positive. Per door: $318/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $285k).
• It's been on market 222 days — a 12% lower offer ($251k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $251k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#190 in IA, #3,480 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, amenities F, commute F.
• Storm Lake Community School District (town): math 47% / reading 54% proficiency, ranked #280 of 289 in IA (top 97%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 84 active listings in the ZIP; 164 units permitted in Buena Vista County in 2024 (71 in 5+ unit buildings).
• Buena Vista County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $44k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $80k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.3% vs local median 2.9% in Storm Lake — 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 222 days. Have you received any prior offers? Is the seller open to a 12% 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 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.