2640 Alvarado Ln N

Plymouth, MN 55447

$489,900D

4 bd · 3.0 ba · 2,551 sqft · Built 1978 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,262/mo
• Mortgage (P&I): −$2,569
• Tax + insurance: −$682
• HOA: −$0
• Vac / Maint / Mgmt: −$685
• Net cashflow: $-674/mo
• Annual: $-8,093/yr
• Cap rate: 4.64%
• Cash-on-cash: -5.90%
• DSCR: 0.74
• 1% rule: 0.67%
• Cash to close: $137,172

Investor read

• This is a 4-bed/3.0-bath single-family listed at $490k.
• At list price, monthly cash flow is $-674 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $371k (24.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $326k (33.4% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $326k (33.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#17 in MN, #517 nationally) — a professional / high-income tenant draw. Strengths: crime A+, commute A+, employment A+; Watch: amenities F, cost of living F.
• Wayzata Public School District (urban): math 75% / reading 78% proficiency, ranked #2 of 301 in MN (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical; only 11% free/reduced lunch — higher-income household profile.
• Zoned schools: Oakwood Elementary (math 65% / reading 65%, grade B+, #128 of 857 statewide, top 15%, 418 students, 20% FRL); Wayzata West Middle (math 69% / reading 79%, grade A, #5 of 258 statewide, top 2%, 681 students, 14% FRL); Wayzata High (math 77% / reading 84%, grade A, #2 of 471 statewide, top 0%, 3,523 students, 14% FRL).
• Market conditions: Rents rising (+1.1%/yr); 123 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 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.
• Current owner paid $106k; list at $490k implies a 361% gain — meaningful room to come down on a strong offer.
• Cap rate 4.6% vs local median 3.1% in Plymouth — 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

• 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?
• 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.
• 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?
• 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.