707 E Center St

Rochester, MN 55904

$299,000B

5 bd · 3.0 ba · 1,818 sqft · Built 1890 · MultiFamily · Active · 47 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,310/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$606
• HOA: −$0
• Vac / Maint / Mgmt: −$1,325
• Net cashflow: $2,811/mo
• Annual: $33,732/yr
• Cap rate: 17.57%
• Cash-on-cash: 40.29%
• DSCR: 2.79
• 1% rule: 2.11%
• Cash to close: $83,720

Investor read

• This is a 3 × 3-bed/3.0-bath units multifamily listed at $299k.
• At list price, monthly cash flow is $3k ($34k/yr) — positive. Per door: $937/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $299k).
• It's been on market 47 days — a 3% lower offer ($290k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $290k (3.0% below list) — sets the bar for market timing.
• 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 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Riverside Central Elementary (math 12% / reading 22%, grade F, #771 of 857 statewide, top 91%, 417 students, 79% FRL); Century Senior High (math 37% / reading 67%, grade D+, #111 of 471 statewide, top 26%, 1,698 students, 31% FRL) — zoned schools average 55% FRL vs 31% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.1%/yr); 149 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 16y ago; this cycle's ask has dropped $66k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $190k; list at $299k implies a 57% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 2.1% rent growth), your $84k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 17.6% vs local median 3.5% in Rochester — 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.
• At $6,310/mo this rent would consume 98% of the median local household income ($77k/yr) (locally 864% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 47 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1890 — 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?
• 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.