813 Pillsbury Ave

Albert Lea, MN 56007

$149,500D+

4 bd · 2.0 ba · 1,952 sqft · Built 1948 · SingleFamily · Pending · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,528/mo
• Mortgage (P&I): −$784
• Tax + insurance: −$256
• HOA: −$0
• Vac / Maint / Mgmt: −$321
• Net cashflow: $167/mo
• Annual: $2,008/yr
• Cap rate: 7.64%
• Cash-on-cash: 4.80%
• DSCR: 1.21
• 1% rule: 1.02%
• Cash to close: $41,860

Investor read

• This is a 4-bed/2.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $167 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $150k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#274 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D+, amenities F, commute F.
• Albert Lea Public School District (town): math 30% / reading 40% proficiency, ranked #258 of 301 in MN (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hawthorne Elementary (math 27% / reading 37%, grade F, #670 of 857 statewide, top 79%, 424 students, 69% FRL); Southwest Middle (math 19% / reading 38%, grade F, #210 of 258 statewide, top 81%, 474 students, 62% FRL); Albert Lea Senior High (math 23% / reading 37%, grade F, #345 of 471 statewide, top 74%, 1,218 students, 53% FRL) — zoned schools average 61% FRL vs 40% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 150 active listings in the ZIP; 16 units permitted in Freeborn County in 2024 (0 in 5+ unit buildings).
• Freeborn County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Cap rate 7.6% vs local median 4.0% in Albert Lea — 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

• Built in 1948 — 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.
• 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.