905 3rd St St SE #406

Cedar Rapids, IA 52401

$205,000F

1 bd · 2.0 ba · 1,045 sqft · Built 1946 · Condo · Pending · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,147/mo
• Mortgage (P&I): −$1,075
• Tax + insurance: −$331
• HOA: −$516
• Vac / Maint / Mgmt: −$241
• Net cashflow: $-1,016/mo
• Annual: $-12,196/yr
• Cap rate: 0.34%
• Cash-on-cash: -21.25%
• DSCR: 0.05
• 1% rule: 0.56%
• Cash to close: $57,400

Investor read

• This is a 1-bed/2.0-bath condo listed at $205k.
• At list price, monthly cash flow is $-1k ($-12k/yr) — negative.
• To cash-flow at today's rent, offer at most $117k (43.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $115k (44.0% below list).
• It's been on market 24 days — a 2% lower offer ($202k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (44.0% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($1k loan paydown + $8k appreciation (4.1% local appreciation)).
• Location reads 78/100 on livability (#134 in IA, #2,474 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, commute F.
• Cedar Rapids Community School District (urban): math 50% / reading 59% proficiency, ranked #265 of 289 in IA (top 92%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: HOA is 45% of rent; built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 2 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 1,023 units permitted in Linn County in 2024 (456 in 5+ unit buildings).
• Linn County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 sale attempts since 9y 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.
• By year 4, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 0.3% vs local median 3.5% in Cedar Rapids — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 39% of the median local income ($35k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1946 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.