505 E Ave

Rock Rapids, IA 51246

$120,000D+

3 bd · 2.0 ba · 2,016 sqft · Built 2013 · SingleFamily · Active · 310 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $998/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$200
• HOA: −$0
• Vac / Maint / Mgmt: −$210
• Net cashflow: $-41/mo
• Annual: $-486/yr
• Cap rate: 5.89%
• Cash-on-cash: -1.45%
• DSCR: 0.94
• 1% rule: 0.83%
• Cash to close: $33,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $120k. Condition is rated fair.
• At list price, monthly cash flow is $-41 ($-486/yr) — negative.
• To cash-flow at today's rent, offer at most $114k (4.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $100k (16.8% below list).
• It's been on market 310 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $100k (16.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#41 in IA, #1,035 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Central Lyon Community School District (rural): math 79% / reading 84% proficiency, ranked #25 of 289 in IA (top 9%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Zoned schools: Central Lyon Elementary School (math 82% / reading 87%, grade A+, #31 of 616 statewide, top 6%, 433 students, 29% FRL); Central Lyon Secondary School (math 77% / reading 82%, grade A-, #34 of 336 statewide, top 14%, 363 students, 24% FRL).
• Market conditions: 40 active listings in the ZIP; 54 units permitted in Lyon County in 2024 (0 in 5+ unit buildings).
• Cap rate 5.9% vs local median 1.4% in Rock Rapids — 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

• 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?
• It's been on market 310 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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 A-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?
• 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.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — Significant weathering and discoloration
• Minor: landscaping — Overgrown vegetation