401 S Main St

Badger, MN 56714

$118,500C-

3 bd · 2.0 ba · 1,824 sqft · Built 1900 · Other · Pending · 143 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,218/mo
• Mortgage (P&I): −$621
• Tax + insurance: −$295
• HOA: −$0
• Vac / Maint / Mgmt: −$256
• Net cashflow: $46/mo
• Annual: $548/yr
• Cap rate: 6.76%
• Cash-on-cash: 1.65%
• DSCR: 1.07
• 1% rule: 1.03%
• Cash to close: $33,180

Investor read

• This is a 3-bed/2.0-bath other listed at $118k.
• At list price, monthly cash flow is $46 ($548/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $118k).
• It's been on market 143 days — a 12% lower offer ($104k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $104k (12.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($819 loan paydown + $1k appreciation (1.0% local appreciation)).
• Location reads 62/100 on livability (#716 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A; Watch: health & safety D+, crime D, amenities F.
• Badger Public School District (rural): math 55% / reading 70% proficiency, ranked #123 of 467 in MN (top 26%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 49 units permitted in Roseau County in 2024 (15 in 5+ unit buildings).
• Roseau County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 18y ago; this cycle's ask has dropped $6k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (1.0% appreciation + 3.0% rent growth), your $33k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 143 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.