111 Kells Ave

Melrose, IA 52569

$152,000C-

3 bd · 1.0 ba · 1,036 sqft · Built 1979 · Other · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,120/mo
• Mortgage (P&I): −$797
• Tax + insurance: −$142
• HOA: −$0
• Vac / Maint / Mgmt: −$235
• Net cashflow: $-54/mo
• Annual: $-649/yr
• Cap rate: 5.87%
• Cash-on-cash: -1.52%
• DSCR: 0.93
• 1% rule: 0.74%
• Cash to close: $42,560

Investor read

• This is a 3-bed/1.0-bath other listed at $152k.
• At list price, monthly cash flow is $-54 ($-649/yr) — negative.
• To cash-flow at today's rent, offer at most $142k (6.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $112k (26.3% below list).
• It's been on market 30 days — a 2% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (26.3% below list) — sets the bar for 1% rule.
• In year one you build about $16k of equity ($1k loan paydown + $15k appreciation (10.0% local appreciation)).
• Location reads 57/100 on livability (#919 in IA) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A-; Watch: crime C-, amenities F, commute F.
• Albia Community School District (town): math 68% / reading 77% proficiency, ranked #117 of 289 in IA (top 40%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Lincoln Center (math 66% / reading 69%, grade B+, #270 of 616 statewide, top 44%, 293 students, 42% FRL); Albia Middle School (math 72% / reading 82%, grade A, #52 of 246 statewide, top 22%, 164 students, 40% FRL); Albia High School (math 68% / reading 83%, grade A-, #79 of 336 statewide, top 25%, 374 students, 38% FRL).
• Market conditions: 26 active listings in the ZIP; 13 units permitted in Monroe County in 2024 (0 in 5+ unit buildings).
• Current owner paid $65k; list at $152k implies a 134% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $43k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 1979 — 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?
• 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.