1125 Warren St

Mankato, MN 56001

$194,900B+

3 bd · 2.0 ba · 2,096 sqft · Built 1881 · SingleFamily · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,608/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$304
• HOA: −$0
• Vac / Maint / Mgmt: −$548
• Net cashflow: $734/mo
• Annual: $8,806/yr
• Cap rate: 10.81%
• Cash-on-cash: 16.14%
• DSCR: 1.72
• 1% rule: 1.34%
• Cash to close: $54,572

Investor read

• This is a 3-bed/2.0-bath single-family listed at $195k.
• At list price, monthly cash flow is $734 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $195k).
• It's been on market 27 days — a 2% lower offer ($192k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $192k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#133 in MN, #2,970 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A; Watch: crime C-, amenities C-, commute F.
• Mankato Public School District (urban): math 48% / reading 56% proficiency, ranked #98 of 301 in MN (top 33%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1881 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.6%/yr); 352 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 269 units permitted in Blue Earth County in 2024 (154 in 5+ unit buildings).
• Blue Earth County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 17y 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 $108k; list at $195k implies a 80% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $55k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 10.8% vs local median 3.4% in Mankato — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $2,608/mo this rent would consume 45% of the median local household income ($70k/yr) (locally 2394% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1881 — 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 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?
• 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.