304 8th Ave. Ave

Charles City, IA 50616

$117,500C+

3 bd · 1.0 ba · 1,344 sqft · Built 1910 · SingleFamily · Pending · 192 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,573/mo
• Mortgage (P&I): −$616
• Tax + insurance: −$202
• HOA: −$0
• Vac / Maint / Mgmt: −$330
• Net cashflow: $425/mo
• Annual: $5,103/yr
• Cap rate: 10.64%
• Cash-on-cash: 15.51%
• DSCR: 1.69
• 1% rule: 1.34%
• Cash to close: $32,900

Investor read

• This is a 3-bed/1.0-bath single-family listed at $118k.
• At list price, monthly cash flow is $425 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $118k).
• It's been on market 192 days — a 12% lower offer ($103k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $103k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $812 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#161 in IA, #2,944 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: amenities F, commute F, employment F.
• Charles City Community School District (town): math 52% / reading 61% proficiency, ranked #262 of 289 in IA (top 91%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 70 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 38 units permitted in Floyd County in 2024 (0 in 5+ unit buildings).
• Floyd County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $22k; list at $118k implies a 444% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $33k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 10.6% vs local median 6.5% in Charles City — 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

• It's been on market 192 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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.
• 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.