Lee (IA) Investor Pulse Report (2026-Q1)

Investors hold a significant 14.1% of the Single-Family Residential market in Lee County, with a total portfolio of 1,542 properties out of 10,963 total SFRs.

The ownership landscape is dominated by individual investors, who own 1,182 properties (76.7%), compared to 373 properties (24.2%) held by companies. This trend is mirrored in the entity count, with 1,387 individual landlords versus just 194 companies.

Cash is the preferred method of ownership, with cash-bought properties (1,167) outnumbering financed ones (375) by more than a 3-to-1 ratio. This suggests a low-leverage, stable investment environment.

The portfolio is overwhelmingly geared towards providing rental housing, with 1,477 of the 1,542 properties (95.8%) being non-owner-occupied. This highlights a clear strategy of buy-and-hold investing over short-term speculation.

An interesting anomaly shows more landlord entities (1,581) than distinct properties owned (1,542), which may point to a high degree of co-ownership or complex partnership structures among investors in the county.

Investors in Q1 2026 secured properties at a staggering 51.5% discount compared to traditional homeowners, paying an average price of $64,969 while homeowners paid $133,864. This amounts to a cash advantage of $68,895 per property.

The price gap between landlords and homeowners has been widening, indicating an increasing ability for investors to find undervalued assets. The discount expanded from 35.7% ($56,893) in Q1 2025 to its current 51.5% level.

The peak purchasing advantage occurred in Q3 2025, when landlords achieved a massive 59.0% discount, paying $103,310 less than homeowners on average for a property.

While homeowner prices have fluctuated, the average acquisition price for landlords has trended downward over the past year, from a high of $102,469 in Q1 2025 to the current low of $64,969 in Q1 2026.

This consistent and growing discount suggests investors are successfully targeting a different segment of the market, likely focusing on properties that require renovations or are otherwise less appealing to traditional retail buyers.

Investors accounted for 16.5% of all single-family home purchases in Q4 2025, acquiring 20 of the 121 properties sold in Lee County during the period.

The market's acquisition activity is almost entirely fueled by small-scale investors. Mom-and-pop landlords (1-10 properties) purchased 19 of the 20 homes, representing 95.0% of all investor buying.

A fresh wave of new investors entered the market, with 14 new entities purchasing single properties. This group alone was responsible for 13 of the 20 landlord acquisitions (65.0%).

Institutional investors with portfolios of over 1,000 properties were completely absent from the market in Q4, making zero purchases and reinforcing the local, small-scale character of Lee County's investor landscape.

Beyond new entrants, the only other significant activity came from landlords in the 3-5 property tier, who acquired 6 homes, showcasing some consolidation among existing small portfolio holders.

The investor market in Lee County is overwhelmingly dominated by small landlords. Those owning 1-10 properties (Tiers 01-04) control a combined 93.0% of all investor-held SFRs.

First-time investors and single-property owners form the bedrock of the rental market, holding 975 properties. This single tier accounts for 61.3% of the entire investor-owned housing supply.

In stark contrast to national narratives, institutional investors (1,000+ properties) have a nearly non-existent presence, owning just 5 properties, which equates to only 0.3% of the investor market.

The ownership structure is highly fragmented, with a long tail of small investors. After the single-property tier, the next largest segments are the 3-5 property tier (15.5%) and the two-property tier (9.1%).

Mid-size investors (11-1,000 properties) collectively own approximately 6.7% of the portfolio, indicating a small but established class of more professionalized operators beyond the mom-and-pop level.

A clear ownership pattern emerges based on portfolio size: investors typically enter the market as individuals and incorporate as they scale. Individuals own 89.8% of properties in the single-property tier.

The 'corporate crossover' point occurs in the 6-10 property tier. At this stage, companies take majority control, owning 65.5% of the properties (74 homes) compared to 34.5% for individuals (39 homes).

Company ownership becomes even more concentrated in larger portfolios. In the 11-20 property tier, companies own a commanding 81.5% of the assets.

Portfolios of 2 to 5 properties represent a transitional phase. In the two-property tier, individuals still hold a majority (66.9%), but company ownership (33.1%) is substantially higher than in the entry-level tier.

This data reveals a distinct investor lifecycle, where growth past a handful of properties correlates strongly with the adoption of a formal company structure for holding assets.

Investor ownership by volume is heavily concentrated in just two zip codes: 52632 (Keokuk) and 52627 (Fort Madison). These two areas contain 647 and 603 investor-owned properties, respectively, accounting for the vast majority of the county's rental stock.

The highest rate of investor ownership is found in smaller markets. Zip code 52624 leads with a 29.0% investor ownership rate, followed by 52631 at 25.7% and 52648 at 20.0%.

A key finding is the distinction between volume and saturation. The zip codes with the highest number of investor properties, 52632 and 52627, have ownership rates of 16.0% and 14.2%. While substantial, these are much lower than the rates in the smaller, more saturated zip codes.

The data clearly identifies Keokuk and Fort Madison as the primary hubs for rental property investment based on the sheer number of properties held by landlords.

This geographic distribution suggests different investment strategies are at play: a high-volume approach in the county's population centers and a high-saturation approach in smaller, niche communities.

Investors in Lee County remain in an accumulation phase, consistently buying more properties than they sell. In Q1 2026, they were net buyers with 21 purchases versus 16 sales.

However, the momentum of net buying is slowing. The buy-to-sell ratio has compressed from a strong 4.07 in 2024 (122 buys vs 30 sells) to 2.53 in 2025 (114 buys vs 45 sells), and now stands at 1.31 in the latest quarter.

Institutional investors have minimal transaction volume but were slight net buyers in 2025, acquiring 3 properties while only selling 1. This activity is too low to signal a major trend but aligns with accumulation.

While acquisition counts have slightly declined year-over-year, disposition activity has increased significantly. Landlords sold 50% more properties in 2025 (45) than in 2024 (30), indicating more market churn and potential profit-taking.

Overall, the historical data shows a market that is still growing its investor-owned portfolio, but the trendline points toward a balancing of buy-and-sell activity in the near future.

In Q1 2026, landlords participated in 13.9% of all single-family residential transactions, with 21 total transactions. This activity was driven exclusively by mom-and-pop tier investors.

A clear pricing difference exists between investor tiers. New landlords in the single-property tier paid the lowest average price at $54,154, while more established landlords in the 3-5 property tier paid considerably more at $84,000.

Established landlords appear to be buying turnkey rentals from their peers. Investors in the 3-5 property tier sourced 83.3% of their Q1 acquisitions from other landlords, suggesting a strategy focused on acquiring existing rental assets.

In contrast, new single-property investors are buying from the open market. Only 14.3% of their purchases came from other landlords, meaning the vast majority were acquired from traditional homeowners.

Institutional investors were entirely on the sidelines during Q1, recording zero transactions. This further underscores that market liquidity and activity in Lee County are dependent on small-scale, local investors.