402 3rd St

Melbourne, IA 50162

$124,900C+

4 bd · 1.0 ba · 1,248 sqft · Built 1900 · SingleFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,152/mo
• Mortgage (P&I): −$655
• Tax + insurance: −$127
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $128/mo
• Annual: $1,535/yr
• Cap rate: 7.52%
• Cash-on-cash: 4.39%
• DSCR: 1.20
• 1% rule: 0.92%
• Cash to close: $34,972

Investor read

• This is a 4-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $128 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $115k (7.8% below list).
• It's been on market 15 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (7.8% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($864 loan paydown + $4k appreciation (3.3% local appreciation)).
• Location reads 66/100 on livability (#503 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime B; Watch: schools D, amenities F, commute F.
• West Marshall Community School District (rural): math 72% / reading 79% proficiency, ranked #56 of 289 in IA (top 19%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 35 units permitted in Marshall County in 2024 (0 in 5+ unit buildings).
• Marshall County population projected at +8% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts 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 $26k; list at $125k implies a 380% gain — meaningful room to come down on a strong offer.
• At projected returns (3.3% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1900 — 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.