601 Park Ave

Sacred Heart, MN 56285

$122,000C-

4 bd · 1.0 ba · 1,064 sqft · Built 1900 · SingleFamily · Pending · 199 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,110/mo
• Mortgage (P&I): −$640
• Tax + insurance: −$191
• HOA: −$0
• Vac / Maint / Mgmt: −$233
• Net cashflow: $46/mo
• Annual: $548/yr
• Cap rate: 6.74%
• Cash-on-cash: 1.60%
• DSCR: 1.07
• 1% rule: 0.91%
• Cash to close: $34,160

Investor read

• This is a 4-bed/1.0-bath single-family listed at $122k.
• At list price, monthly cash flow is $46 ($548/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $111k (9.0% below list).
• It's been on market 199 days — a 12% lower offer ($107k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $107k (12.0% below list) — sets the bar for market timing.
• In year one you build about $12k of equity ($843 loan paydown + $11k appreciation (9.2% local appreciation)).
• Location reads 60/100 on livability (#765 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing B+; Watch: health & safety D+, employment D, schools F.
• Renville County West School District (rural): math 26% / reading 43% proficiency, ranked #255 of 301 in MN (top 85%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 17 units permitted in Renville County in 2024 (0 in 5+ unit buildings).
• Renville County population projected at -28% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 5y 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 $50k; list at $122k implies a 144% gain — meaningful room to come down on a strong offer.
• At projected returns (9.2% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 199 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.