505 S 2nd St

Marion, IL 62959

$103,000C-

2 bd · 1.0 ba · 1,032 sqft · Built 1940 · Other · Active · 147 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,024/mo
• Mortgage (P&I): −$540
• Tax + insurance: −$169
• HOA: −$0
• Vac / Maint / Mgmt: −$215
• Net cashflow: $100/mo
• Annual: $1,195/yr
• Cap rate: 7.45%
• Cash-on-cash: 4.14%
• DSCR: 1.18
• 1% rule: 0.99%
• Cash to close: $28,840

Investor read

• This is a 2-bed/1.0-bath other listed at $103k.
• At list price, monthly cash flow is $100 ($1k/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 $102k (0.6% below list).
• It's been on market 147 days — a 12% lower offer ($91k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $91k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $712 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#896 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D, schools F, crime F.
• Marion CUSD 2 (urban): math 20% / reading 31% proficiency, ranked #317 of 620 in IL (top 51%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.4%/yr); 226 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 130 units permitted in Williamson County in 2024 (5 in 5+ unit buildings).
• 5 sale attempts; this cycle's ask has dropped $6k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $29k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.5% vs local median 4.0% in Marion — 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 17% of the median local income ($71k/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 147 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1940 — 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 F-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.