1946 Franklin Ave

Des Moines, IA 50314

$152,500D+

3 bd · 1.0 ba · 1,102 sqft · Built 1910 · SingleFamily · Active · 208 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,112/mo
• Mortgage (P&I): −$800
• Tax + insurance: −$160
• HOA: −$0
• Vac / Maint / Mgmt: −$234
• Net cashflow: $-81/mo
• Annual: $-976/yr
• Cap rate: 5.65%
• Cash-on-cash: -2.29%
• DSCR: 0.90
• 1% rule: 0.73%
• Cash to close: $42,700

Investor read

• This is a 3-bed/1.0-bath single-family listed at $152k.
• At list price, monthly cash flow is $-81 ($-976/yr) — negative.
• To cash-flow at today's rent, offer at most $138k (9.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $111k (27.1% below list).
• It's been on market 208 days — a 12% lower offer ($134k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $111k (27.1% below list) — sets the bar for 1% rule.
• In year one you build about $16k of equity ($1k loan paydown + $15k appreciation (10.0% local appreciation)).
• Location reads 81/100 on livability (#63 in IA, #1,432 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, crime F.
• Des Moines Independent Community School District (urban): math 43% / reading 46% proficiency, ranked #289 of 289 in IA (top 100%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Monroe Elementary School (math 30% / reading 27%, grade F, #606 of 616 statewide, top 98%, 423 students, 95% FRL); Meredith Middle School (math 40% / reading 40%, grade F, #239 of 246 statewide, top 97%, 664 students, 84% FRL); Hoover High School (math 46% / reading 55%, grade D+, #311 of 336 statewide, top 93%, 991 students, 78% FRL) — zoned schools average 86% FRL vs 63% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.2%/yr); 64 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 2,953 units permitted in Polk County in 2024 (540 in 5+ unit buildings).
• Polk County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 21y ago; this cycle's ask has dropped $12k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $83k; list at $152k implies a 84% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 8.0% rent growth), your $43k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.7% vs local median 3.1% in Des Moines — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 208 days. Have you received any prior offers? Is the seller open to a 27% 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.
• 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?
• 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?
• 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?