407 E Fayette Ave

Patoka, IL 62875

$140,000D+

3 bd · 2.0 ba · 1,500 sqft · Built 2018 · SingleFamily · Pending · 109 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,216/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$252
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $-25/mo
• Annual: $-297/yr
• Cap rate: 6.08%
• Cash-on-cash: -0.76%
• DSCR: 0.97
• 1% rule: 0.87%
• Cash to close: $39,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $-25 ($-297/yr) — negative.
• To cash-flow at today's rent, offer at most $136k (3.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $122k (13.1% below list).
• It's been on market 109 days — a 9% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $122k (13.1% below list) — sets the bar for 1% rule.
• In year one you build about $14k of equity ($968 loan paydown + $13k appreciation (9.0% local appreciation)).
• Location reads 66/100 on livability (#597 in IL) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Patoka CUSD 100 (rural): math 10% / reading 20% proficiency, ranked #765 of 919 in IL (top 83%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Patoka Elem School (math 8% / reading 17%, grade F, #1,371 of 2,056 statewide, top 68%, 114 students, 0% FRL); Patoka Jr High School (math 5% / reading 5%, grade F, #636 of 665 statewide, top 98%, 48 students, 0% FRL); Patoka Sr High School (math 24% / reading 24%, grade F, #256 of 693 statewide, top 44%, 71 students, 0% FRL) — zoned schools average 0% FRL vs 46% district-wide (46 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 6 active listings in the ZIP; 2 units permitted in Marion County in 2024 (0 in 5+ unit buildings).
• Marion County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (9.0% appreciation + 3.0% rent growth), your $39k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 109 days. Have you received any prior offers? Is the seller open to a 13% 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.