725 Dewey Ave

Mount Vernon, IL 62864

$37,000B-

2 bd · 1.0 ba · 1,008 sqft · Built 1930 · Other · Pending · 75 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,047/mo
• Mortgage (P&I): −$194
• Tax + insurance: −$121
• HOA: −$0
• Vac / Maint / Mgmt: −$220
• Net cashflow: $512/mo
• Annual: $6,145/yr
• Cap rate: 22.90%
• Cash-on-cash: 59.31%
• DSCR: 3.64
• 1% rule: 2.83%
• Cash to close: $10,360

Investor read

• This is a 2-bed/1.0-bath other listed at $37k.
• At list price, monthly cash flow is $512 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $37k).
• It's been on market 75 days — a 6% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $256 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#413 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Mt Vernon Twp Hsd 201 (town): math 13% / reading 16% proficiency, ranked #532 of 620 in IL (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Mount Vernon High School (math 13% / reading 16%, grade F, #479 of 693 statewide, top 71%, 1,210 students, 0% FRL).
• Watch-outs: property tax is 3.4% of price; built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 186 active listings in the ZIP; 6 units permitted in Jefferson County in 2024 (0 in 5+ unit buildings).
• Jefferson County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $10k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 22.9% vs local median 5.3% in Mount Vernon — 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 75 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1930 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?
• 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.