518 5th St

Perry, IA 50220

$54,900B

2 bd · 1.0 ba · 784 sqft · Built 1945 · SingleFamily · Pending · 445 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $885/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$186
• HOA: −$0
• Vac / Maint / Mgmt: −$186
• Net cashflow: $226/mo
• Annual: $2,709/yr
• Cap rate: 11.23%
• Cash-on-cash: 17.63%
• DSCR: 1.78
• 1% rule: 1.61%
• Cash to close: $15,372

Investor read

• This is a 2-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $226 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($885 rent vs $55k).
• It's been on market 445 days — a 12% lower offer ($48k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $48k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#273 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment D-.
• Perry Community School District (town): math 51% / reading 59% proficiency, ranked #266 of 289 in IA (top 92%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Perry Elementary (math 61% / reading 56%, grade B-, #432 of 616 statewide, top 71%, 815 students, 60% FRL); Perry Middle School (math 51% / reading 59%, grade B-, #201 of 246 statewide, top 82%, 367 students, 64% FRL); Perry High School (math 43% / reading 64%, grade C-, #295 of 336 statewide, top 88%, 564 students, 56% FRL) — zoned schools at 60% FRL track the district average.
• Watch-outs: property tax is 3.6% of price; built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 50 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 53% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,503 units permitted in Dallas County in 2024 (630 in 5+ unit buildings).
• Dallas County population projected at +74% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 11y ago; this cycle's ask has dropped $30k (35%) 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 $15k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.2% vs local median 3.8% in Perry — 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 445 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1945 — 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.
• 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.