1416 Hawthorne Ave

Waterloo, IA 50702

$150,000C

5 bd · 1.5 ba · 1,847 sqft · Built 1896 · SingleFamily · Pending · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,661/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$323
• HOA: −$0
• Vac / Maint / Mgmt: −$349
• Net cashflow: $203/mo
• Annual: $2,430/yr
• Cap rate: 7.91%
• Cash-on-cash: 5.79%
• DSCR: 1.26
• 1% rule: 1.11%
• Cash to close: $42,000

Investor read

• This is a 5-bed/1.5-bath single-family listed at $150k.
• At list price, monthly cash flow is $203 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $150k).
• It's been on market 26 days — a 2% lower offer ($148k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $148k (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 $4k 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: Lowell Elementary School (math 42% / reading 42%, grade F, #563 of 616 statewide, top 93%, 513 students, 74% FRL); West High School (math 55% / reading 63%, grade C+, #273 of 336 statewide, top 81%, 1,652 students, 62% FRL).
• Watch-outs: built in 1896 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.7%/yr); 126 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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 $116k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.9% 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.
• This rent runs 32% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1896 — 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.