406 N 1st Ave

Marshalltown, IA 50158

$79,900B+

4 bd · 1.0 ba · 1,764 sqft · Built 1900 · SingleFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,355/mo
• Mortgage (P&I): −$419
• Tax + insurance: −$113
• HOA: −$0
• Vac / Maint / Mgmt: −$285
• Net cashflow: $539/mo
• Annual: $6,463/yr
• Cap rate: 14.38%
• Cash-on-cash: 28.89%
• DSCR: 2.29
• 1% rule: 1.70%
• Cash to close: $22,372

Investor read

• This is a 4-bed/1.0-bath single-family listed at $80k.
• At list price, monthly cash flow is $539 ($6k/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 17 days — a 2% lower offer ($79k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (1.5% 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 78/100 on livability (#133 in IA, #2,464 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: employment C-, amenities F.
• Marshalltown Community School District (town): math 50% / reading 52% proficiency, ranked #278 of 289 in IA (top 96%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 163 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 35 units permitted in Marshall County in 2024 (0 in 5+ unit buildings).
• Marshall County population projected at +8% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 3y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.4% vs local median 4.4% in Marshalltown — 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

• Built in 1900 — 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.
• 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.