304 2nd St SE

Hinckley, MN 55037

$200,000D

4 bd · 3.0 ba · 1,920 sqft · Built 1958 · SingleFamily · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,301/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$308
• HOA: −$0
• Vac / Maint / Mgmt: −$273
• Net cashflow: $-329/mo
• Annual: $-3,951/yr
• Cap rate: 4.32%
• Cash-on-cash: -7.06%
• DSCR: 0.69
• 1% rule: 0.65%
• Cash to close: $56,000

Investor read

• This is a 4-bed/3.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-329 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $142k (29.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $130k (34.9% below list).
• It's been on market 61 days — a 6% lower offer ($188k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $130k (34.9% below list) — sets the bar for 1% rule.
• In year one you build about $21k of equity ($1k loan paydown + $20k appreciation (10.0% local appreciation)).
• Location reads 64/100 on livability (#572 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: health & safety C-, schools F, amenities F.
• Hinckley-Finlayson School District (rural): math 20% / reading 35% proficiency, ranked #272 of 301 in MN (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 51 active listings in the ZIP; 116 units permitted in Pine County in 2024 (0 in 5+ unit buildings).
• Pine County population projected at -24% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 27y 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 $139k; 44% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 61 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• Built in 1958 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.