658 Marengo Ave

Marengo, IA 52301

$49,500B

2 bd · 1.0 ba · 902 sqft · Built 1925 · SingleFamily · Pending · 154 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $700/mo
• Mortgage (P&I): −$260
• Tax + insurance: −$156
• HOA: −$0
• Vac / Maint / Mgmt: −$147
• Net cashflow: $138/mo
• Annual: $1,650/yr
• Cap rate: 9.63%
• Cash-on-cash: 11.91%
• DSCR: 1.53
• 1% rule: 1.41%
• Cash to close: $13,860

Investor read

• This is a 2-bed/1.0-bath single-family listed at $50k.
• At list price, monthly cash flow is $138 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($700 rent vs $50k).
• It's been on market 154 days — a 12% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $342 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#390 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Iowa Valley Community School District (rural): math 70% / reading 77% proficiency, ranked #94 of 289 in IA (top 32%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: property tax is 3.3% of price; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 38 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 12 units permitted in Iowa County in 2024 (0 in 5+ unit buildings).
• Iowa County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 4y ago; this cycle's ask has dropped $38k (43%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $28k; list at $50k implies a 74% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $14k cash investment doubles in ~10 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 154 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1925 — 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?
• 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.
• 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?
• 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.