523 S 2nd St

Winterset, IA 50273

$125,000C-

3 bd · 1.0 ba · 1,556 sqft · Built 1870 · SingleFamily · Active · 250 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,333/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$277
• HOA: −$0
• Vac / Maint / Mgmt: −$280
• Net cashflow: $120/mo
• Annual: $1,442/yr
• Cap rate: 7.45%
• Cash-on-cash: 4.12%
• DSCR: 1.18
• 1% rule: 1.07%
• Cash to close: $35,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $120 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $125k).
• It's been on market 250 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#139 in IA, #2,547 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Winterset Community School District (town): math 73% / reading 69% proficiency, ranked #123 of 289 in IA (top 43%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1870 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 122 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 125 units permitted in Madison County in 2024 (51 in 5+ unit buildings).
• Madison County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 4y ago; this cycle's ask has dropped $30k (19%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 7.4% vs local median 2.1% in Winterset — 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 250 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1870 — 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 B-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?
• 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.