18556 Highway 5

Centerville, IA 52544

$89,000C+

2 bd · 1.0 ba · 1,056 sqft · Built 1976 · Other · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $950/mo
• Mortgage (P&I): −$467
• Tax + insurance: −$208
• HOA: −$0
• Vac / Maint / Mgmt: −$200
• Net cashflow: $76/mo
• Annual: $912/yr
• Cap rate: 7.32%
• Cash-on-cash: 3.66%
• DSCR: 1.16
• 1% rule: 1.07%
• Cash to close: $24,920

Investor read

• This is a 2-bed/1.0-bath other listed at $89k.
• At list price, monthly cash flow is $76 ($912/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($950 rent vs $89k).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $2k of equity ($615 loan paydown + $961 appreciation (1.1% local appreciation)).
• Location reads 73/100 on livability (#277 in IA) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Centerville Community School District (town): math 57% / reading 65% proficiency, ranked #251 of 289 in IA (top 87%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 82 active listings in the ZIP; 6 units permitted in Appanoose County in 2024 (0 in 5+ unit buildings).
• Appanoose County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 7y 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.
• Current owner paid $20k; list at $89k implies a 345% gain — meaningful room to come down on a strong offer.
• At projected returns (1.1% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 7.3% vs local median 4.0% in Centerville — 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 1976 — 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 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?
• 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.