451 Paul Ave

Lake Wilson, MN 56151

$198,000D

5 bd · 2.0 ba · 2,440 sqft · Built 1915 · SingleFamily · Active · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,472/mo
• Mortgage (P&I): −$1,038
• Tax + insurance: −$162
• HOA: −$0
• Vac / Maint / Mgmt: −$309
• Net cashflow: $-37/mo
• Annual: $-443/yr
• Cap rate: 6.07%
• Cash-on-cash: -0.80%
• DSCR: 0.96
• 1% rule: 0.74%
• Cash to close: $55,440

Investor read

• This is a 5-bed/2.0-bath single-family listed at $198k.
• At list price, monthly cash flow is $-37 ($-443/yr) — negative.
• To cash-flow at today's rent, offer at most $191k (3.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $147k (25.6% below list).
• It's been on market 46 days — a 3% lower offer ($192k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $147k (25.6% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($1k loan paydown + $6k appreciation (3.0% local appreciation)).
• Location reads 64/100 on livability (#618 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime D+, health & safety D+, amenities F.
• Murray County Central School District (rural): math 68% / reading 60% proficiency, ranked #28 of 301 in MN (top 9%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Murray Co. Central Elementary (math 76% / reading 57%, grade B+, #113 of 857 statewide, top 14%, 386 students, 43% FRL); Murray County Central Secondary (math 57% / reading 62%, grade C+, #46 of 471 statewide, top 11%, 335 students, 35% FRL) — zoned schools average 39% FRL vs 22% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 9 active listings in the ZIP; 21 units permitted in Murray County in 2024 (0 in 5+ unit buildings).
• Murray County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $55k cash investment doubles in ~7 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$32k 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 46 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1915 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?
• 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.