406 4th St

Deep River, IA 52222

$144,500C+

5 bd · 2.5 ba · 1,339 sqft · Built 1921 · SingleFamily · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,265/mo
• Mortgage (P&I): −$758
• Tax + insurance: −$160
• HOA: −$0
• Vac / Maint / Mgmt: −$266
• Net cashflow: $82/mo
• Annual: $985/yr
• Cap rate: 6.97%
• Cash-on-cash: 2.43%
• DSCR: 1.11
• 1% rule: 0.88%
• Cash to close: $40,460

Investor read

• This is a 5-bed/2.5-bath single-family listed at $144k.
• At list price, monthly cash flow is $82 ($985/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 $127k (12.4% below list).
• It's been on market 80 days — a 6% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $127k (12.4% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($999 loan paydown + $12k appreciation (8.2% local appreciation)).
• Location reads 61/100 on livability (#769 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety D, schools F, amenities F.
• Montezuma Community School District (rural): math 73% / reading 79% proficiency, ranked #55 of 289 in IA (top 19%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1921 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 11y 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 $65k; list at $144k implies a 122% gain — meaningful room to come down on a strong offer.
• At projected returns (8.2% appreciation + 3.0% rent growth), your $40k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, 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

• It's been on market 80 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1921 — 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 F-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.