2806 Avenue J

Fort Madison, IA 52627

$65,000B-

2 bd · 1.0 ba · 808 sqft · Built 1898 · SingleFamily · Active · 136 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $715/mo
• Mortgage (P&I): −$341
• Tax + insurance: −$79
• HOA: −$0
• Vac / Maint / Mgmt: −$150
• Net cashflow: $145/mo
• Annual: $1,741/yr
• Cap rate: 8.97%
• Cash-on-cash: 9.56%
• DSCR: 1.43
• 1% rule: 1.10%
• Cash to close: $18,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $65k.
• At list price, monthly cash flow is $145 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($715 rent vs $65k).
• It's been on market 136 days — a 12% lower offer ($57k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $57k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $449 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#230 in IA, #4,353 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F, employment D-.
• Fort Madison Community School District (town): math 55% / reading 58% proficiency, ranked #260 of 289 in IA (top 90%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1898 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 64 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 15 units permitted in Lee County in 2024 (0 in 5+ unit buildings).
• Lee County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 2y 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 $40k; list at $65k implies a 60% gain — meaningful room to come down on a strong offer.
• Cap rate 9.0% vs local median 5.3% in Fort Madison — 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 136 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1898 — 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.
• Schools are B-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.
• 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.