703 Center Ave

Ottumwa, IA 52501

$47,500B

3 bd · 1.0 ba · 2,141 sqft · Built 1910 · SingleFamily · Active · 89 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $650/mo
• Mortgage (P&I): −$249
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$136
• Net cashflow: $114/mo
• Annual: $1,371/yr
• Cap rate: 9.18%
• Cash-on-cash: 10.31%
• DSCR: 1.46
• 1% rule: 1.37%
• Cash to close: $13,300

Investor read

• This is a 3-bed/1.0-bath single-family listed at $48k.
• At list price, monthly cash flow is $114 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($650 rent vs $48k).
• It's been on market 89 days — a 6% lower offer ($45k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $45k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $328 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#91 in IA, #1,900 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D-, employment D-.
• Ottumwa Community School District (town): math 50% / reading 54% proficiency, ranked #277 of 289 in IA (top 96%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 3.3% of price; built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 186 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 44 units permitted in Wapello County in 2024 (0 in 5+ unit buildings).
• Wapello County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Cap rate 9.2% vs local median 5.9% in Ottumwa — 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 89 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.
• Crime grade is D 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.