106 W 3rd St

Villisca, IA 50864

$125,000D+

2 bd · 2.0 ba · 1,245 sqft · Built 1896 · SingleFamily · Active · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,042/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$208
• HOA: −$0
• Vac / Maint / Mgmt: −$219
• Net cashflow: $-41/mo
• Annual: $-488/yr
• Cap rate: 5.90%
• Cash-on-cash: -1.39%
• DSCR: 0.94
• 1% rule: 0.83%
• Cash to close: $35,000

Investor read

• This is a 2-bed/2.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $-41 ($-488/yr) — negative.
• To cash-flow at today's rent, offer at most $119k (4.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $104k (16.6% below list).
• It's been on market 41 days — a 3% lower offer ($121k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (16.6% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($864 loan paydown + $12k appreciation (10.0% local appreciation)).
• Location reads 71/100 on livability (#350 in IA) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Villisca Community School District (rural): math 58% / reading 58% proficiency, ranked #256 of 289 in IA (top 89%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Sylvia Enarson Elementary School (math 44% / reading 54%, grade D, #514 of 616 statewide, top 85%, 130 students, 62% FRL); Southwest Valley Middle School (math 62% / reading 62%, grade B+, #175 of 246 statewide, top 72%, 149 students, 48% FRL).
• Watch-outs: built in 1896 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 16 active listings in the ZIP; 13 units permitted in Montgomery County in 2024 (0 in 5+ unit buildings).
• Montgomery County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 41 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1896 — 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.
• 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?
• 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.