206 Chicago St

Lakefield, MN 56150

$40,000B+

3 bd · 2.0 ba · 1,528 sqft · Built 1920 · Other · Pending · 181 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,230/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$72
• HOA: −$0
• Vac / Maint / Mgmt: −$258
• Net cashflow: $689/mo
• Annual: $8,272/yr
• Cap rate: 26.97%
• Cash-on-cash: 73.85%
• DSCR: 4.29
• 1% rule: 3.07%
• Cash to close: $11,200

Investor read

• This is a 3-bed/2.0-bath other listed at $40k.
• At list price, monthly cash flow is $689 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 181 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• In year one you build about $375 of equity ($277 loan paydown + $98 appreciation (0.2% local appreciation)).
• Location reads 76/100 on livability (#159 in MN, #3,445 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Jackson County Central School District (town): math 46% / reading 48% proficiency, ranked #160 of 301 in MN (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 4 units permitted in Jackson County in 2024 (0 in 5+ unit buildings).
• Jackson County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (0.2% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 181 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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 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?
• 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.