1900 4th Ave SW #206

Spencer, IA 51301

$121,000D

1 bd · 1.0 ba · 783 sqft · Built 2000 · Condo · Pending · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,236/mo
• Mortgage (P&I): −$635
• Tax + insurance: −$130
• HOA: −$266
• Vac / Maint / Mgmt: −$260
• Net cashflow: $-54/mo
• Annual: $-652/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.92%
• DSCR: 0.91
• 1% rule: 1.02%
• Cash to close: $33,880

Investor read

• This is a 1-bed/1.0-bath condo listed at $121k.
• At list price, monthly cash flow is $-54 ($-652/yr) — negative.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $121k).
• It's been on market 46 days — a 3% lower offer ($117k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $117k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $837 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#168 in IA, #3,020 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Spencer Community School District (town): math 73% / reading 72% proficiency, ranked #114 of 289 in IA (top 39%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Fairview Park Elementary (math 82% / reading 47%, grade B, #317 of 616 statewide, top 58%, 308 students, 49% FRL); Spencer Middle School (math 77% / reading 75%, grade A, #59 of 246 statewide, top 26%, 514 students, 43% FRL); Spencer High School (math 68% / reading 76%, grade B+, #117 of 336 statewide, top 39%, 712 students, 40% FRL).
• Watch-outs: HOA is 22% of rent.
• Market conditions: 108 active listings in the ZIP; 11 units permitted in Clay County in 2024 (0 in 5+ unit buildings).
• Clay County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 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 $91k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.8% vs local median 4.8% in Spencer — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 46 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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.