42357 439th Ave

Perham, MN 56573

$286,000F

4 bd · 2.0 ba · 864 sqft · Built 1981 · SingleFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,920/mo
• Mortgage (P&I): −$1,500
• Tax + insurance: −$251
• HOA: −$0
• Vac / Maint / Mgmt: −$403
• Net cashflow: $-234/mo
• Annual: $-2,803/yr
• Cap rate: 5.31%
• Cash-on-cash: -3.50%
• DSCR: 0.84
• 1% rule: 0.67%
• Cash to close: $80,080

Investor read

• This is a 4-bed/2.0-bath single-family listed at $286k.
• At list price, monthly cash flow is $-234 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $245k (14.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $192k (32.9% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $192k (32.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#328 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Perham-Dent Public School District (town): math 45% / reading 57% proficiency, ranked #110 of 301 in MN (top 36%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 93 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 3 sale attempts since 19y 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.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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?
• 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.
• 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.