1029 Division St

Webster City, IA 50595

$174,900B

3 bd · 2.0 ba · 2,040 sqft · Built 1906 · SingleFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,500/mo
• Mortgage (P&I): −$917
• Tax + insurance: −$272
• HOA: −$0
• Vac / Maint / Mgmt: −$525
• Net cashflow: $786/mo
• Annual: $9,433/yr
• Cap rate: 11.69%
• Cash-on-cash: 19.26%
• DSCR: 1.86
• 1% rule: 1.43%
• Cash to close: $48,972

Investor read

• This is a 3-bed/2.0-bath single-family listed at $175k.
• At list price, monthly cash flow is $786 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $175k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#137 in IA, #2,493 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Webster City Community School District (town): math 60% / reading 60% proficiency, ranked #250 of 289 in IA (top 86%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1906 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 83 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 29 units permitted in Hamilton County in 2024 (5 in 5+ unit buildings).
• Hamilton County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $130k; 35% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.7% vs local median 4.3% in Webster City — 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 1906 — 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 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.