126 2nd St SW

Chisholm, MN 55719

$154,900D

5 bd · 2.0 ba · 1,959 sqft · Built 1920 · Other · Pending · 140 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,429/mo
• Mortgage (P&I): −$812
• Tax + insurance: −$249
• HOA: −$0
• Vac / Maint / Mgmt: −$300
• Net cashflow: $68/mo
• Annual: $810/yr
• Cap rate: 6.82%
• Cash-on-cash: 1.87%
• DSCR: 1.08
• 1% rule: 0.92%
• Cash to close: $43,372

Investor read

• This is a 5-bed/2.0-bath other listed at $155k.
• At list price, monthly cash flow is $68 ($810/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 $143k (7.8% below list).
• It's been on market 140 days — a 12% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $136k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#224 in MN, #4,803 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Chisholm Public School District (town): math 37% / reading 46% proficiency, ranked #219 of 301 in MN (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Vaughan Elementary (math 54% / reading 44%, grade D, #423 of 857 statewide, top 55%, 214 students, 60% FRL); Chisholm Elementary (math 42% / reading 47%, grade D, #118 of 258 statewide, top 48%, 136 students, 58% FRL); Chisholm Secondary (math 27% / reading 42%, grade F, #306 of 471 statewide, top 70%, 334 students, 43% FRL) — zoned schools average 54% FRL vs 36% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 36 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 6 sale attempts since 13y 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 $750; list at $155k implies a 20553% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 140 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?
• 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.