234 6th St SW

Spencer, IA 51301

$180,000D

4 bd · 1.5 ba · 1,800 sqft · Built 1964 · SingleFamily · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,460/mo
• Mortgage (P&I): −$944
• Tax + insurance: −$286
• HOA: −$0
• Vac / Maint / Mgmt: −$307
• Net cashflow: $-77/mo
• Annual: $-924/yr
• Cap rate: 5.78%
• Cash-on-cash: -1.83%
• DSCR: 0.92
• 1% rule: 0.81%
• Cash to close: $50,400

Investor read

• This is a 4-bed/1.5-bath single-family listed at $180k.
• At list price, monthly cash flow is $-77 ($-924/yr) — negative.
• To cash-flow at today's rent, offer at most $166k (7.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $146k (18.9% below list).
• It's been on market 83 days — a 6% lower offer ($169k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $146k (18.9% 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 77/100 on livability (#168 in IA, #3,020 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, cost of living A+; Watch: employment D, amenities F, commute F.
• Spencer Community School District (town): math 73% / reading 72% proficiency, ranked #114 of 289 in IA (top 39%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: 108 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 11 units permitted in Clay County in 2024 (0 in 5+ unit buildings).
• Clay County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts; this cycle's ask has dropped $10k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.8% vs local median 4.6% in Spencer — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 83 days. Have you received any prior offers? Is the seller open to a 19% concession, seller financing, or rate buy-down credit?
• Built in 1964 — 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 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.