2501 Emerson Ave S

Minneapolis, MN 55405

$565,000D-

6 bd · 3.0 ba · 2,214 sqft · Built 1900 · MultiFamily · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,103/mo
• Mortgage (P&I): −$2,963
• Tax + insurance: −$968
• HOA: −$0
• Vac / Maint / Mgmt: −$1,072
• Net cashflow: $100/mo
• Annual: $1,203/yr
• Cap rate: 6.51%
• Cash-on-cash: 0.76%
• DSCR: 1.03
• 1% rule: 0.90%
• Cash to close: $158,200

Investor read

• This is a 1×4.0bd/2.0ba + 2×2.0bd/1.0ba units multifamily listed at $565k.
• At list price, monthly cash flow is $100 ($1k/yr) — positive. Per door: $33/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $510k (9.7% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $510k (9.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — 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: Rents rising (+1.9%/yr); 100 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); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 6y 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.
• Cap rate 6.5% vs local median 3.1% in Minneapolis — 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 $5,103/mo this rent would consume 84% of the median local household income ($73k/yr) (locally 985% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1900 — 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.
• Crime grade is F 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.
• 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.