22 SE 3rd Ave

Waukon, IA 52172

$125,000C+

2 bd · 3.0 ba · 1,214 sqft · Built 1936 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,147/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$172
• HOA: −$0
• Vac / Maint / Mgmt: −$241
• Net cashflow: $78/mo
• Annual: $941/yr
• Cap rate: 7.05%
• Cash-on-cash: 2.69%
• DSCR: 1.12
• 1% rule: 0.92%
• Cash to close: $35,000

Investor read

• This is a 2-bed/3.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $78 ($941/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 $115k (8.2% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $115k (8.2% below list) — sets the bar for 1% rule.
• In year one you build about $250 of equity ($864 loan paydown + $-614 appreciation (-0.5% local appreciation)).
• Location reads 79/100 on livability (#125 in IA, #2,301 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• Allamakee Community School District (town): math 71% / reading 75% proficiency, ranked #103 of 289 in IA (top 36%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1936 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 40 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 61 units permitted in Allamakee County in 2024 (0 in 5+ unit buildings).
• Allamakee County population projected at -26% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $67k; list at $125k implies a 86% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.0% vs local median 3.8% in Waukon — 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

• Built in 1936 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.