2801 Highway 6 Lot 399

Iowa City, IA 52240

$28,000D+

4 bd · 2.0 ba · 1,216 sqft · Built 1997 · Manufactured · Active · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,653/mo
• Mortgage (P&I): −$147
• Tax + insurance: −$47
• HOA: −$0
• Vac / Maint / Mgmt: −$347
• Net cashflow: $1,113/mo
• Annual: $13,352/yr
• Cap rate: 53.98%
• Cash-on-cash: 170.31%
• DSCR: 8.58
• 1% rule: 5.90%
• Cash to close: $7,840

Investor read

• This is a 4-bed/2.0-bath manufactured listed at $28k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $28k).
• It's been on market 105 days — a 9% lower offer ($25k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $25k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $194 of loan paydown is wiped out by about $840 of value loss. Plan a longer hold.
• Location reads 86/100 on livability (#13 in IA, #450 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+.
• Iowa City Community School District (urban): math 65% / reading 70% proficiency, ranked #174 of 289 in IA (top 60%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+6.3%/yr); 260 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 714 units permitted in Johnson County in 2024 (158 in 5+ unit buildings).
• Johnson County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 sale attempts since 7y ago; this cycle's ask is 12% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• At projected returns (-3.0% appreciation + 6.3% rent growth), your $8k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 54.0% vs local median 2.7% in Iowa 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.
• This rent runs 37% of the median local income ($53k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• 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.