900 Rachael St #302

North Liberty, IA 52317

$165,000D-

2 bd · 2.0 ba · 980 sqft · Built 2008 · Condo · Pending · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,460/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$254
• HOA: −$130
• Vac / Maint / Mgmt: −$307
• Net cashflow: $-96/mo
• Annual: $-1,150/yr
• Cap rate: 5.60%
• Cash-on-cash: -2.49%
• DSCR: 0.89
• 1% rule: 0.88%
• Cash to close: $46,200

Investor read

• This is a 2-bed/2.0-bath condo listed at $165k.
• At list price, monthly cash flow is $-96 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $148k (10.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $146k (11.5% below list).
• It's been on market 37 days — a 3% lower offer ($160k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $146k (11.5% 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 85/100 on livability (#18 in IA, #596 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, employment A+; Watch: amenities F, commute F.
• 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.
• Market conditions: Rents rising fast (+7.6%/yr); 343 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 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.
• 5 sale attempts since 11y 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 $128k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.6% vs local median 3.1% in North Liberty — 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 ($105k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 37 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 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.