1216 5th St NW

Cedar Rapids, IA 52405

$179,450B-

4 bd · 2.0 ba · 1,694 sqft · Built 1890 · MultiFamily · Pending · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,623/mo
• Mortgage (P&I): −$941
• Tax + insurance: −$730
• HOA: −$0
• Vac / Maint / Mgmt: −$551
• Net cashflow: $402/mo
• Annual: $4,819/yr
• Cap rate: 12.06%
• Cash-on-cash: 20.59%
• DSCR: 1.92
• 1% rule: 1.46%
• Cash to close: $50,246

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $179k.
• At list price, monthly cash flow is $402 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $179k).
• It's been on market 19 days — a 2% lower offer ($177k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $177k (1.5% below list) — sets the bar for market timing.
• 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 78/100 on livability (#134 in IA, #2,474 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, commute F.
• Cedar Rapids Community School District (urban): math 50% / reading 59% proficiency, ranked #265 of 289 in IA (top 92%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Harrison Elementary School (math 37% / reading 42%, grade F, #579 of 616 statewide, top 95%, 285 students, 78% FRL); Roosevelt Creative Corridor Business Academy (math 36% / reading 47%, grade F, #235 of 246 statewide, top 96%, 510 students, 69% FRL); John F Kennedy High School (math 63% / reading 77%, grade B+, #146 of 336 statewide, top 45%, 1,714 students, 31% FRL) — zoned schools average 59% FRL vs 43% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $460/mo; built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+12.4%/yr); 149 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,023 units permitted in Linn County in 2024 (456 in 5+ unit buildings).
• Linn County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 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 $55k; list at $179k implies a 226% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $50k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.1% vs local median 3.5% in Cedar Rapids — 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 1890 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.