501 N Shelby Ave

Salem, IL 62881

$115,000D-

2 bd · 1.0 ba · 1,156 sqft · Built 1909 · SingleFamily · Active · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,086/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$192
• HOA: −$0
• Vac / Maint / Mgmt: −$228
• Net cashflow: $63/mo
• Annual: $760/yr
• Cap rate: 6.95%
• Cash-on-cash: 2.36%
• DSCR: 1.10
• 1% rule: 0.94%
• Cash to close: $32,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $115k.
• At list price, monthly cash flow is $63 ($760/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 $109k (5.6% below list).
• It's been on market 69 days — a 6% lower offer ($108k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $108k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $795 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#467 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment D-.
• Salem Chsd 600 (town): math 25% / reading 30% proficiency, ranked #571 of 919 in IL (top 62%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Hawthorn Elem School (math 22% / reading 32%, grade F, #749 of 2,056 statewide, top 40%, 399 students, 0% FRL); Franklin Park Middle School (math 25% / reading 44%, grade F, #201 of 665 statewide, top 31%, 529 students, 0% FRL); Salem Community High School (math 22% / reading 17%, grade F, #397 of 693 statewide, top 61%, 732 students, 0% FRL).
• Watch-outs: built in 1909 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 49 active listings in the ZIP; 2 units permitted in Marion County in 2024 (0 in 5+ unit buildings).
• Marion County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 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.
• Cap rate 7.0% vs local median 5.6% in Salem — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

Questions for listing agent

• It's been on market 69 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1909 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• 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.