402 E 5th St

Atlantic, IA 50022

$119,900C-

3 bd · 1.0 ba · 1,389 sqft · Built 1930 · SingleFamily · Active · 176 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,132/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$130
• HOA: −$0
• Vac / Maint / Mgmt: −$238
• Net cashflow: $135/mo
• Annual: $1,625/yr
• Cap rate: 7.65%
• Cash-on-cash: 4.84%
• DSCR: 1.22
• 1% rule: 0.94%
• Cash to close: $33,572

Investor read

• This is a 3-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $135 ($2k/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 $113k (5.6% below list).
• It's been on market 176 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $829 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#243 in IA, #4,704 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety B+; Watch: crime D+, amenities F, commute F.
• Atlantic Community School District (town): math 68% / reading 72% proficiency, ranked #155 of 289 in IA (top 54%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Washington Elementary School (math 72% / reading 47%, grade B-, #390 of 616 statewide, top 69%, 515 students, 40% FRL); Atlantic Middle School (math 71% / reading 74%, grade A, #90 of 246 statewide, top 38%, 329 students, 40% FRL); Atlantic High School (math 65% / reading 76%, grade B+, #140 of 336 statewide, top 43%, 485 students, 39% FRL) — zoned schools at 40% FRL track the district average.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 51 active listings in the ZIP; 14 units permitted in Cass County in 2024 (0 in 5+ unit buildings).
• Cass County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 7 sale attempts since 15y 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 $102k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.6% vs local median 3.0% in Atlantic — 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 176 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1930 — 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.
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.