319 1 St

Defiance, IA 51527

$120,000C+

5 bd · 2.0 ba · 1,740 sqft · Built 1912 · SingleFamily · Pending · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,292/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$177
• HOA: −$0
• Vac / Maint / Mgmt: −$271
• Net cashflow: $215/mo
• Annual: $2,574/yr
• Cap rate: 8.44%
• Cash-on-cash: 7.66%
• DSCR: 1.34
• 1% rule: 1.08%
• Cash to close: $33,600

Investor read

• This is a 5-bed/2.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $215 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $120k).
• It's been on market 105 days — a 9% lower offer ($109k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $109k (9.0% below list) — sets the bar for market timing.
• In year one you build about $3k of equity ($830 loan paydown + $2k appreciation (1.8% local appreciation)).
• Location reads 58/100 on livability (#890 in IA) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing B+; Watch: employment D, schools F, amenities F.
• Harlan Community School District (town): math 72% / reading 77% proficiency, ranked #81 of 289 in IA (top 28%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1912 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 2 active listings in the ZIP; 8 units permitted in Shelby County in 2024 (0 in 5+ unit buildings).
• Shelby County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $80k; list at $120k implies a 50% gain — meaningful room to come down on a strong offer.
• At projected returns (1.8% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~6 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 105 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1912 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.