22845 NE Pickerel Lake Rd

Holmesville, MN 56501

$240,000B-

3 bd · 1.0 ba · 1,204 sqft · Built 1888 · SingleFamily · Active · 101 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,117/mo
• Mortgage (P&I): −$1,259
• Tax + insurance: −$185
• HOA: −$0
• Vac / Maint / Mgmt: −$655
• Net cashflow: $1,018/mo
• Annual: $12,219/yr
• Cap rate: 11.38%
• Cash-on-cash: 18.18%
• DSCR: 1.81
• 1% rule: 1.30%
• Cash to close: $67,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $240k).
• It's been on market 101 days — a 9% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $218k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Detroit Lakes Public School District (town): math 44% / reading 50% proficiency, ranked #155 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Roosevelt Elementary (math 48% / reading 54%, grade C-, #406 of 857 statewide, top 48%, 579 students, 55% FRL); Detroit Lakes Middle (math 29% / reading 42%, grade F, #172 of 258 statewide, top 68%, 596 students, 46% FRL); Detroit Lakes Senior High (math 52% / reading 57%, grade C-, #87 of 471 statewide, top 22%, 865 students, 37% FRL).
• Watch-outs: built in 1888 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 307 active listings in the ZIP; 156 units permitted in Becker County in 2024 (0 in 5+ unit buildings).
• Becker County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 4y 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 $150k; list at $240k implies a 60% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $67k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 101 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1888 — 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.
• 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.