10409 Upton Ave S

Bloomington, MN 55431

$275,000D

3 bd · 1.0 ba · 2,910 sqft · Built 1955 · SingleFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,512/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$563
• HOA: −$0
• Vac / Maint / Mgmt: −$528
• Net cashflow: $-20/mo
• Annual: $-245/yr
• Cap rate: 6.20%
• Cash-on-cash: -0.32%
• DSCR: 0.99
• 1% rule: 0.91%
• Cash to close: $77,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $275k.
• At list price, monthly cash flow is $-20 ($-245/yr) — negative.
• To cash-flow at today's rent, offer at most $271k (1.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $251k (8.7% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $251k (8.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#168 in MN, #3,640 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, housing A+; Watch: crime D-, amenities F, health & safety F.
• Bloomington Public School District (urban): math 35% / reading 49% proficiency, ranked #192 of 301 in MN (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hillcrest Elementary (math 37% / reading 52%, grade F, #534 of 857 statewide, top 66%, 353 students, 29% FRL); Oak Grove Middle (math 29% / reading 48%, grade F, #156 of 258 statewide, top 62%, 703 students, 45% FRL); Kennedy Senior High (math 27% / reading 47%, grade F, #282 of 471 statewide, top 63%, 1,601 students, 66% FRL).
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.7%/yr); 73 active listings in the ZIP; solid renter incomes; 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.
• 2 sale attempts since 23y ago; this cycle's ask is 77% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $204k; 35% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.2% vs local median 3.5% in Bloomington — 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 1955 — 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?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.