2812 Cleveland Ave

Des Moines, IA 50317

$122,000C+

2 bd · 1.0 ba · 808 sqft · Built 1920 · SingleFamily · Pending · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,235/mo
• Mortgage (P&I): −$640
• Tax + insurance: −$162
• HOA: −$0
• Vac / Maint / Mgmt: −$259
• Net cashflow: $174/mo
• Annual: $2,084/yr
• Cap rate: 8.00%
• Cash-on-cash: 6.10%
• DSCR: 1.27
• 1% rule: 1.01%
• Cash to close: $34,160

Investor read

• This is a 2-bed/1.0-bath single-family listed at $122k.
• At list price, monthly cash flow is $174 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $122k).
• It's been on market 61 days — a 6% lower offer ($115k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $843 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#63 in IA, #1,432 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, crime F.
• Des Moines Independent Community School District (urban): math 43% / reading 46% proficiency, ranked #289 of 289 in IA (top 100%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Stowe Elementary School (math 27% / reading 32%, grade F, #604 of 616 statewide, top 98%, 313 students, 88% FRL); Hoyt Middle School (math 33% / reading 40%, grade F, #242 of 246 statewide, top 98%, 486 students, 80% FRL); East High School (math 38% / reading 51%, grade F, #324 of 336 statewide, top 97%, 2,040 students, 79% FRL) — zoned schools average 82% FRL vs 63% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.3%/yr); 362 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 57% of comp listings sitting > 30 days — soft ceiling on asking rent; 2,953 units permitted in Polk County in 2024 (540 in 5+ unit buildings).
• Polk County population projected at +37% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 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.
• Cap rate 8.0% vs local median 3.1% in Des Moines — 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 61 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is F 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?
• 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.