204 Lake Ave E

Hill City, MN 55748

$344,900C+

9 bd · 5.1 ba · 2,080 sqft · Built 1985 · MultiFamily · Active · 275 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,581/mo
• Mortgage (P&I): −$1,809
• Tax + insurance: −$414
• HOA: −$0
• Vac / Maint / Mgmt: −$752
• Net cashflow: $606/mo
• Annual: $7,275/yr
• Cap rate: 8.40%
• Cash-on-cash: 7.53%
• DSCR: 1.34
• 1% rule: 1.04%
• Cash to close: $96,572

Investor read

• This is a 3 × 3-bed/?-bath units multifamily listed at $345k.
• At list price, monthly cash flow is $606 ($7k/yr) — positive. Per door: $202/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $345k).
• It's been on market 275 days — a 12% lower offer ($304k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $304k (12.0% below list) — sets the bar for market timing.
• In year one you build about $13k of equity ($2k loan paydown + $11k appreciation (3.2% local appreciation)).
• Location reads 69/100 on livability (#360 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Hill City Public School District (rural): math 35% / reading 45% proficiency, ranked #366 of 467 in MN (top 78%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hill City Elementary (math 50% / reading 30%, grade F, #601 of 857 statewide, top 70%, 104 students, 74% FRL); Hill City Middle School (math 22% / reading 34%, grade F, #211 of 258 statewide, top 82%, 67 students, 66% FRL); Hill City Senior High (reading 24%, 85 students, 71% FRL) — zoned schools average 70% FRL vs 50% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 25 active listings in the ZIP; 134 units permitted in Aitkin County in 2024 (0 in 5+ unit buildings).
• Aitkin County population projected at -25% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 4y ago; this cycle's ask has dropped $20k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $250k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (3.2% appreciation + 3.0% rent growth), your $97k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 3, 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

• It's been on market 275 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.