420 S Main St

Paullina, IA 51046

$139,000C-

4 bd · 3.5 ba · 1,658 sqft · Built 1922 · SingleFamily · Pending · 150 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,238/mo
• Mortgage (P&I): −$729
• Tax + insurance: −$173
• HOA: −$0
• Vac / Maint / Mgmt: −$260
• Net cashflow: $76/mo
• Annual: $908/yr
• Cap rate: 6.95%
• Cash-on-cash: 2.33%
• DSCR: 1.10
• 1% rule: 0.89%
• Cash to close: $38,920

Investor read

• This is a 4-bed/3.5-bath single-family listed at $139k.
• At list price, monthly cash flow is $76 ($908/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 $124k (10.9% below list).
• It's been on market 150 days — a 12% lower offer ($122k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $122k (12.0% below list) — sets the bar for market timing.
• In year one you build about $9k of equity ($961 loan paydown + $8k appreciation (6.1% local appreciation)).
• Location reads 76/100 on livability (#204 in IA, #3,719 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• South O'Brien Community School District (rural): math 64% / reading 66% proficiency, ranked #196 of 289 in IA (top 68%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1922 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 13 units permitted in O'Brien County in 2024 (0 in 5+ unit buildings).
• O'Brien County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 7y ago 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 $89k; list at $139k implies a 56% gain — meaningful room to come down on a strong offer.
• At projected returns (6.1% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 150 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1922 — 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.