505 S 8th St St

Forest City, IA 50436

$68,000B+

3 bd · 1.5 ba · 1,139 sqft · Built 1950 · SingleFamily · Active · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,063/mo
• Mortgage (P&I): −$357
• Tax + insurance: −$229
• HOA: −$0
• Vac / Maint / Mgmt: −$223
• Net cashflow: $255/mo
• Annual: $3,056/yr
• Cap rate: 10.79%
• Cash-on-cash: 16.05%
• DSCR: 1.71
• 1% rule: 1.56%
• Cash to close: $19,040

Investor read

• This is a 3-bed/1.5-bath single-family listed at $68k.
• At list price, monthly cash flow is $255 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $68k).
• It's been on market 32 days — a 3% lower offer ($66k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $66k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $470 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#160 in IA, #2,902 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: employment C-, amenities F, commute F.
• Forest City Community School District (town): math 67% / reading 78% proficiency, ranked #111 of 289 in IA (top 38%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Forest City Elementary School (math 62% / reading 72%, grade B+, #273 of 616 statewide, top 51%, 487 students, 39% FRL); Forest City Middle School (math 69% / reading 83%, grade A, #59 of 246 statewide, top 26%, 330 students, 41% FRL); Forest City High School (math 66% / reading 75%, grade B+, #140 of 336 statewide, top 43%, 324 students, 35% FRL).
• Watch-outs: property tax is 3.5% of price; built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 45 active listings in the ZIP; 6 units permitted in Winnebago County in 2024 (0 in 5+ unit buildings).
• Winnebago County population projected at -10% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 10y ago; this cycle's ask has dropped $12k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $19k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 10.8% vs local median 4.1% in Forest 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.

Questions for listing agent

• It's been on market 32 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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.