706 Merlin Ct

Troy, IL 62294

$169,900D+

3 bd · 1.0 ba · 864 sqft · Built 1964 · SingleFamily · Pending · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,548/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$282
• HOA: −$0
• Vac / Maint / Mgmt: −$325
• Net cashflow: $50/mo
• Annual: $601/yr
• Cap rate: 6.65%
• Cash-on-cash: 1.26%
• DSCR: 1.06
• 1% rule: 0.91%
• Cash to close: $47,572

Investor read

• This is a 3-bed/1.0-bath single-family listed at $170k.
• At list price, monthly cash flow is $50 ($601/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 $155k (8.9% below list).
• It's been on market 79 days — a 6% lower offer ($160k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $155k (8.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#134 in IL, #2,492 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, cost of living A+; Watch: amenities F, commute F.
• Triad CUSD 2 (rural): math 43% / reading 41% proficiency, ranked #106 of 620 in IL (top 17%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: C A Henning School (math 42% / reading 39%, grade F, #380 of 2,056 statewide, top 19%, 743 students, 0% FRL); Triad Middle School (math 45% / reading 44%, grade D, #95 of 665 statewide, top 15%, 901 students, 0% FRL); Triad High School (math 43% / reading 40%, grade F, #82 of 693 statewide, top 12%, 1,205 students, 0% FRL) — zoned schools average 0% FRL vs 18% district-wide (18 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 57 active listings in the ZIP; high-income renter base; 336 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 3y 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 $130k; 31% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 2.0% in Troy — 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.
• This rent is only 15% of the median local income ($120k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• It's been on market 79 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1964 — 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.
• 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.