308 Lois Ave S

Herman, MN 56248

$155,000D

3 bd · 1.0 ba · 1,272 sqft · Built 1976 · SingleFamily · Active · 110 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,082/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$205
• HOA: −$0
• Vac / Maint / Mgmt: −$227
• Net cashflow: $-163/mo
• Annual: $-1,957/yr
• Cap rate: 5.03%
• Cash-on-cash: -4.51%
• DSCR: 0.80
• 1% rule: 0.70%
• Cash to close: $43,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $155k.
• At list price, monthly cash flow is $-163 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $126k (18.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $108k (30.2% below list).
• It's been on market 110 days — a 9% lower offer ($141k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $108k (30.2% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#469 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, crime D+, amenities F.
• Herman-Norcross School District (rural): math 50% / reading 70% proficiency, ranked #150 of 467 in MN (top 32%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Herman Elementary (math 15% / reading 34%, grade F, #721 of 857 statewide, top 84%, 59 students, 58% FRL); Herman Secondary (math 70% / reading 50%, grade C+, #46 of 471 statewide, top 11%, 43 students, 46% FRL) — zoned schools average 52% FRL vs 31% district-wide (21 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 42% at this address vs 60% district-wide (-18 pts) — the specific schools serving this property underperform the Herman-Norcross School District average; the district grade overstates school quality for this exact location.
• Market conditions: 5 active listings in the ZIP; 2 units permitted in Grant County in 2024 (0 in 5+ unit buildings).
• Grant County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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 $120k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 3, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• It's been on market 110 days. Have you received any prior offers? Is the seller open to a 30% concession, seller financing, or rate buy-down credit?
• Built in 1976 — 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 A-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?
• 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?