3520 Lake Dr

Pontoon Beach, IL 62040

$140,000D-

2 bd · 3.0 ba · 1,970 sqft · Built 1935 · SingleFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,230/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$254
• HOA: −$0
• Vac / Maint / Mgmt: −$258
• Net cashflow: $-16/mo
• Annual: $-196/yr
• Cap rate: 6.15%
• Cash-on-cash: -0.50%
• DSCR: 0.98
• 1% rule: 0.88%
• Cash to close: $39,200

Investor read

• This is a 2-bed/3.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $-16 ($-196/yr) — negative.
• To cash-flow at today's rent, offer at most $137k (2.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $123k (12.1% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $123k (12.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $968 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#1,042 in IL) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: amenities F, commute F, health & safety F.
• Granite City CUSD 9 (suburban): math 9% / reading 11% proficiency, ranked #570 of 620 in IL (top 92%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Granite City High School (math 10% / reading 12%, grade F, #522 of 693 statewide, top 76%, 1,805 students, 0% FRL) — zoned schools average 0% FRL vs 59% district-wide (59 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.7%/yr); 194 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 336 units permitted in Madison County in 2024 (0 in 5+ unit buildings).
• Madison County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1935 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.