427 West St

Grinnell, IA 50112

$108,500C-

3 bd · 1.0 ba · 944 sqft · Built 1900 · SingleFamily · Active · 118 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $948/mo
• Mortgage (P&I): −$569
• Tax + insurance: −$156
• HOA: −$0
• Vac / Maint / Mgmt: −$199
• Net cashflow: $24/mo
• Annual: $286/yr
• Cap rate: 6.56%
• Cash-on-cash: 0.94%
• DSCR: 1.04
• 1% rule: 0.87%
• Cash to close: $30,380

Investor read

• This is a 3-bed/1.0-bath single-family listed at $108k.
• At list price, monthly cash flow is $24 ($286/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 $95k (12.6% below list).
• It's been on market 118 days — a 9% lower offer ($99k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $95k (12.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $750 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#123 in IA, #2,270 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Grinnell-Newburg Community School District (town): math 76% / reading 79% proficiency, ranked #47 of 289 in IA (top 16%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 98 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 5y ago; this cycle's ask has dropped $6k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 2.9% in Grinnell — 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 118 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 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?
• 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.