32692 US 71

Red Eye, MN 56464

$110,000C

1 bd · 1.0 ba · 1,460 sqft · Built 1958 · SingleFamily · Active · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $981/mo
• Mortgage (P&I): −$577
• Tax + insurance: −$127
• HOA: −$0
• Vac / Maint / Mgmt: −$206
• Net cashflow: $72/mo
• Annual: $860/yr
• Cap rate: 7.08%
• Cash-on-cash: 2.79%
• DSCR: 1.12
• 1% rule: 0.89%
• Cash to close: $30,800

Investor read

• This is a 1-bed/1.0-bath single-family listed at $110k.
• At list price, monthly cash flow is $72 ($860/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 $98k (10.8% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $98k (10.8% below list) — sets the bar for 1% rule.
• In year one you build about $12k of equity ($761 loan paydown + $11k appreciation (10.0% local appreciation)).
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Menahga Public School District (rural): math 52% / reading 57% proficiency, ranked #246 of 467 in MN (top 53%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 52 active listings in the ZIP; 52 units permitted in Wadena County in 2024 (0 in 5+ unit buildings).
• Wadena County population projected to shrink 6% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 12y 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 $78k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1958 — 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.
• 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.