2802 Muscatine Ave

Iowa City, IA 52240

$193,000D+

2 bd · 3.0 ba · 1,127 sqft · Built 1984 · Condo · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,559/mo
• Mortgage (P&I): −$1,012
• Tax + insurance: −$341
• HOA: −$0
• Vac / Maint / Mgmt: −$327
• Net cashflow: $-122/mo
• Annual: $-1,460/yr
• Cap rate: 5.54%
• Cash-on-cash: -2.70%
• DSCR: 0.88
• 1% rule: 0.81%
• Cash to close: $54,040

Investor read

• This is a 2-bed/3.0-bath condo listed at $193k.
• At list price, monthly cash flow is $-122 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $172k (11.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $156k (19.2% below list).
• It's been on market 33 days — a 3% lower offer ($187k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $156k (19.2% 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 $6k of value loss. Plan a longer hold.
• Location reads 86/100 on livability (#13 in IA, #450 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, cost of living A+.
• Iowa City Community School District (urban): math 65% / reading 70% proficiency, ranked #174 of 289 in IA (top 60%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Robert Lucas Elementary School (math 52% / reading 57%, grade C, #462 of 616 statewide, top 79%, 285 students, 44% FRL); Southeast Junior High School (math 64% / reading 68%, grade A-, #152 of 246 statewide, top 62%, 812 students, 50% FRL); Iowa City High School (math 62% / reading 73%, grade B, #186 of 336 statewide, top 57%, 1,599 students, 40% FRL).
• Market conditions: Rents rising fast (+6.3%/yr); 260 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; 714 units permitted in Johnson County in 2024 (158 in 5+ unit buildings).
• Johnson County population projected at +60% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $119k; list at $193k implies a 62% gain — meaningful room to come down on a strong offer.
• Cap rate 5.5% vs local median 2.7% in Iowa City — 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 runs 35% of the median local income ($53k/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?
• It's been on market 33 days. Have you received any prior offers? Is the seller open to a 19% concession, seller financing, or rate buy-down credit?
• 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 A-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.
• 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.