218 5th Ave SE

Elbow Lake, MN 56531

$159,900D+

4 bd · 2.0 ba · 1,056 sqft · Built 1956 · SingleFamily · Active · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,213/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$175
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $-55/mo
• Annual: $-658/yr
• Cap rate: 5.88%
• Cash-on-cash: -1.47%
• DSCR: 0.93
• 1% rule: 0.76%
• Cash to close: $44,772

Investor read

• This is a 4-bed/2.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $-55 ($-658/yr) — negative.
• To cash-flow at today's rent, offer at most $150k (6.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (24.1% below list).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $121k (24.1% below list) — sets the bar for 1% rule.
• In year one you build about $9k of equity ($1k loan paydown + $8k appreciation (5.1% local appreciation)).
• Location reads 75/100 on livability (#188 in MN, #4,060 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• West Central Area (rural): math 47% / reading 61% proficiency, ranked #80 of 301 in MN (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 22 active listings in the ZIP; 2 units permitted in Grant County in 2024 (0 in 5+ unit buildings).
• Grant County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 6 sale attempts since 17y 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 $78k; list at $160k implies a 106% gain — meaningful room to come down on a strong offer.
• At projected returns (5.1% appreciation + 3.0% rent growth), your $45k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 1956 — 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 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.
• 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.