813 2nd St W

Morgan, MN 56266

$169,000C-

3 bd · 1.0 ba · 3,038 sqft · Built 1978 · SingleFamily · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,442/mo
• Mortgage (P&I): −$886
• Tax + insurance: −$240
• HOA: −$0
• Vac / Maint / Mgmt: −$303
• Net cashflow: $13/mo
• Annual: $157/yr
• Cap rate: 6.39%
• Cash-on-cash: 0.33%
• DSCR: 1.01
• 1% rule: 0.85%
• Cash to close: $47,320

Investor read

• This is a 3-bed/1.0-bath single-family listed at $169k.
• At list price, monthly cash flow is $13 ($157/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $144k (14.7% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $144k (14.7% below list) — sets the bar for 1% rule.
• In year one you build about $18k of equity ($1k loan paydown + $17k appreciation (10.0% local appreciation)).
• Location reads 78/100 on livability (#107 in MN, #2,487 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Cedar Mountain School District (rural): math 34% / reading 44% proficiency, ranked #229 of 301 in MN (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Cedar Mountain Elementary (math 57% / reading 57%, grade C+, #265 of 857 statewide, top 35%, 194 students, 55% FRL); Cedar Mountain Secondary (math 22% / reading 37%, grade F, #354 of 471 statewide, top 77%, 245 students, 46% FRL) — zoned schools average 51% FRL vs 31% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 7 active listings in the ZIP; 25 units permitted in Redwood County in 2024 (0 in 5+ unit buildings).
• Redwood County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 8y 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 $95k; list at $169k implies a 78% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $47k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$46k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1978 — 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.
• 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.