409 S Park St

Fairmont, MN 56031

$89,999B

3 bd · 3.0 ba · 2,826 sqft · Built 1915 · SingleFamily · Active · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,217/mo
• Mortgage (P&I): −$472
• Tax + insurance: −$219
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $270/mo
• Annual: $3,243/yr
• Cap rate: 9.90%
• Cash-on-cash: 12.87%
• DSCR: 1.57
• 1% rule: 1.35%
• Cash to close: $25,200

Investor read

• This is a 3-bed/3.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $270 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $90k).
• It's been on market 65 days — a 6% lower offer ($85k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $85k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $622 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#407 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, employment D+, amenities F.
• Fairmont Area School District (town): math 45% / reading 51% proficiency, ranked #148 of 301 in MN (top 49%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Fairmont Elementary School (math 50% / reading 51%, grade D+, #412 of 857 statewide, top 48%, 956 students, 62% FRL); Fairmont Jr./Sr. High School (math 40% / reading 50%, grade D-, #187 of 471 statewide, top 40%, 859 students, 49% FRL) — zoned schools average 56% FRL vs 35% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 94 active listings in the ZIP; 19 units permitted in Martin County in 2024 (0 in 5+ unit buildings).
• Martin County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $62k; 45% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 9.9% vs local median 3.4% in Fairmont — 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.

Questions for listing agent

• It's been on market 65 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1915 — 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.
• 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.