1203 W 5th St

Spencer, IA 51301

$182,499D

3 bd · 1.0 ba · 1,946 sqft · Built 1956 · SingleFamily · Pending · 234 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,460/mo
• Mortgage (P&I): −$957
• Tax + insurance: −$316
• HOA: −$0
• Vac / Maint / Mgmt: −$307
• Net cashflow: $-120/mo
• Annual: $-1,436/yr
• Cap rate: 5.51%
• Cash-on-cash: -2.81%
• DSCR: 0.87
• 1% rule: 0.80%
• Cash to close: $51,100

Investor read

• This is a 3-bed/1.0-bath single-family listed at $182k.
• At list price, monthly cash flow is $-120 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $161k (11.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $146k (20.0% below list).
• It's been on market 234 days — a 12% lower offer ($161k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $146k (20.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#168 in IA, #3,020 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Spencer Community School District (town): math 73% / reading 72% proficiency, ranked #114 of 289 in IA (top 39%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Fairview Park Elementary (math 82% / reading 47%, grade B, #317 of 616 statewide, top 58%, 308 students, 49% FRL); Spencer Middle School (math 77% / reading 75%, grade A, #59 of 246 statewide, top 26%, 514 students, 43% FRL); Spencer High School (math 68% / reading 76%, grade B+, #117 of 336 statewide, top 39%, 712 students, 40% FRL).
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 108 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 11 units permitted in Clay County in 2024 (0 in 5+ unit buildings).
• Clay County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 3y 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.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 234 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1956 — 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 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.