135 Polk St

Waterloo, IA 50703

$50,000A-

2 bd · 1.0 ba · 898 sqft · Built 1914 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $824/mo
• Mortgage (P&I): −$262
• Tax + insurance: −$84
• HOA: −$0
• Vac / Maint / Mgmt: −$173
• Net cashflow: $304/mo
• Annual: $3,653/yr
• Cap rate: 13.60%
• Cash-on-cash: 26.09%
• DSCR: 2.16
• 1% rule: 1.65%
• Cash to close: $14,000

Investor read

• This is a 2-bed/1.0-bath single-family listed at $50k.
• At list price, monthly cash flow is $304 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($824 rent vs $50k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $346 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#74 in IA, #1,589 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment D-.
• Waterloo Community School District (urban): math 50% / reading 54% proficiency, ranked #276 of 289 in IA (top 96%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Highland Elementary School (math 51% / reading 45%, grade D, #528 of 616 statewide, top 86%, 477 students, 85% FRL); George Washington Carver Academy (math 36% / reading 43%, grade F, #240 of 246 statewide, top 98%, 442 students, 91% FRL); East High School (math 39% / reading 58%, grade D, #317 of 336 statewide, top 94%, 1,022 students, 73% FRL) — zoned schools average 83% FRL vs 58% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.7%/yr); 98 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 54% of comp listings sitting > 30 days — soft ceiling on asking rent; 287 units permitted in Black Hawk County in 2024 (67 in 5+ unit buildings).
• Black Hawk County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 9y 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 $35k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 6.7% rent growth), your $14k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.6% vs local median 4.2% in Waterloo — 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

• Built in 1914 — 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.