Bourne Plan

Pella, IA 50219

$255,000F

3 bd · 2.5 ba · 1,399 sqft · Built — · SingleFamily · Active · 954 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,559/mo
• Mortgage (P&I): −$2,037
• Tax + insurance: −$647
• HOA: −$12
• Vac / Maint / Mgmt: −$327
• Net cashflow: $-1,465/mo
• Annual: $-17,583/yr
• Cap rate: 1.77%
• Cash-on-cash: -16.17%
• DSCR: 0.28
• 1% rule: 0.40%
• Cash to close: $108,766

Investor read

• This is a 3-bed/2.5-bath single-family listed at $255k.
• At list price, monthly cash flow is $-1k ($-18k/yr) — negative.
• To cash-flow at today's rent, offer at most $176k (30.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $156k (38.9% below list).
• It's been on market 954 days — a 12% lower offer ($224k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $156k (38.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 90/100 on livability (#6 in IA, #101 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, employment A+; Watch: commute F.
• Pella Community School District (town): math 85% / reading 85% proficiency, ranked #8 of 289 in IA (top 3%) — strong family-tenant draw, lease renewals of 3-5y typical; only 13% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising fast (+8.2%/yr); 243 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 71% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 122 units permitted in Marion County in 2024 (0 in 5+ unit buildings).
• Marion County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.

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 954 days. Have you received any prior offers? Is the seller open to a 39% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.