418 Carter Ave

Ottumwa, IA 52501

$119,900D-

3 bd · 1.0 ba · 1,326 sqft · Built 1951 · SingleFamily · Active · 242 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $800/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$204
• HOA: −$0
• Vac / Maint / Mgmt: −$168
• Net cashflow: $-201/mo
• Annual: $-2,411/yr
• Cap rate: 4.28%
• Cash-on-cash: -7.18%
• DSCR: 0.68
• 1% rule: 0.67%
• 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 $-201 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $84k (29.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $80k (33.3% below list).
• It's been on market 242 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $80k (33.3% below list) — sets the bar for 1% rule.
• 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 80/100 on livability (#91 in IA, #1,900 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D-, employment D-.
• Ottumwa Community School District (town): math 50% / reading 54% proficiency, ranked #277 of 289 in IA (top 96%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 192 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 44 units permitted in Wapello County in 2024 (0 in 5+ unit buildings).
• Wapello County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 7y ago; this cycle's ask has dropped $19k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $54k; list at $120k implies a 122% gain — meaningful room to come down on a strong offer.
• Cap rate 4.3% vs local median 5.8% in Ottumwa — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 242 days. Have you received any prior offers? Is the seller open to a 33% concession, seller financing, or rate buy-down credit?
• Built in 1951 — 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?
• 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.