46 Lookout Trce

The Galena Territory, IL 61036

$315,000D-

3 bd · 2.0 ba · 1,896 sqft · Built 1985 · Other · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,650/mo
• Mortgage (P&I): −$1,652
• Tax + insurance: −$558
• HOA: −$117
• Vac / Maint / Mgmt: −$556
• Net cashflow: $-233/mo
• Annual: $-2,795/yr
• Cap rate: 5.41%
• Cash-on-cash: -3.17%
• DSCR: 0.86
• 1% rule: 0.84%
• Cash to close: $88,200

Investor read

• This is a 3-bed/2.0-bath other listed at $315k.
• At list price, monthly cash flow is $-233 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $274k (13.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $265k (15.9% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $265k (15.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#313 in IL) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: health & safety C-, amenities F, commute F.
• Scales Mound CUSD 211 (rural): math 45% / reading 45% proficiency, ranked #216 of 919 in IL (top 24%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Scales Mound Elem School (math 24% / reading 15%, grade F, #1,043 of 2,056 statewide, top 51%, 127 students, 0% FRL); Scales Mound Jr High School (math 34% / reading 54%, grade D, #95 of 665 statewide, top 15%, 61 students, 0% FRL); Scales Mound High School (math 30% / reading 30%, grade F, #179 of 693 statewide, top 27%, 69 students, 0% FRL) — zoned schools average 0% FRL vs 20% district-wide (20 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 31% at this address vs 45% district-wide (-14 pts) — the specific schools serving this property underperform the Scales Mound CUSD 211 average; the district grade overstates school quality for this exact location.
• Market conditions: 156 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 58 units permitted in Jo Daviess County in 2024 (0 in 5+ unit buildings).
• Jo Daviess County population projected at -25% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 8y 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.
• Cap rate 5.4% vs local median 3.3% in The Galena Territory — 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

• 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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.
• 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.