874 Frank St

Galesburg, IL 61401

$79,900B

2 bd · 1.0 ba · 900 sqft · Built 1949 · SingleFamily · Under Contract · 98 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,047/mo
• Mortgage (P&I): −$419
• Tax + insurance: −$90
• HOA: −$0
• Vac / Maint / Mgmt: −$220
• Net cashflow: $318/mo
• Annual: $3,819/yr
• Cap rate: 11.07%
• Cash-on-cash: 17.07%
• DSCR: 1.76
• 1% rule: 1.31%
• Cash to close: $22,372

Investor read

• This is a 2-bed/1.0-bath single-family listed at $80k.
• At list price, monthly cash flow is $318 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $80k).
• It's been on market 98 days — a 9% lower offer ($73k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $73k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $552 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#367 in IL) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, commute F, employment D-.
• Galesburg CUSD 205 (town): math 13% / reading 22% proficiency, ranked #488 of 620 in IL (top 79%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Galesburg Jr High School (math 13% / reading 27%); Galesburg Senior High School (math 19% / reading 24%, grade F, #345 of 693 statewide, top 50%, 1,762 students, 0% FRL) — zoned schools average 0% FRL vs 60% district-wide (60 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 198 active listings in the ZIP.
• Knox County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 18y ago; this cycle's ask has dropped $5k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $58k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 11.1% vs local median 6.4% in Galesburg — 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 98 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1949 — 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.