1742 520th Ave

Barnes City, IA 52222

$125,000C+

3 bd · 2.0 ba · 1,344 sqft · Built 1974 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,199/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$126
• HOA: −$0
• Vac / Maint / Mgmt: −$252
• Net cashflow: $166/mo
• Annual: $1,987/yr
• Cap rate: 7.88%
• Cash-on-cash: 5.68%
• DSCR: 1.25
• 1% rule: 0.96%
• Cash to close: $35,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $166 ($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 $120k (4.0% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $120k (4.0% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($864 loan paydown + $10k appreciation (8.2% local appreciation)).
• Location reads 59/100 on livability (#873 in IA) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: crime C-, health & safety D, amenities F.
• Montezuma Community School District (rural): math 73% / reading 79% proficiency, ranked #55 of 289 in IA (top 19%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Montezuma Elementary School (math 92% / reading 77%, grade A+, #31 of 616 statewide, top 6%, 229 students, 34% FRL); Montezuma Junior High School (math 62% / reading 72%, grade A-, #140 of 246 statewide, top 60%, 112 students, 39% FRL); Montezuma High School (math 67% / reading 87%, grade A-, #60 of 336 statewide, top 21%, 148 students, 28% FRL).
• Market conditions: 7 active listings in the ZIP; 27 units permitted in Poweshiek County in 2024 (0 in 5+ unit buildings).
• Poweshiek County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (8.2% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.