805 12th Ave NE

Rochester, MN 55906

$279,000D-

3 bd · 1.0 ba · 1,292 sqft · Built 1951 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,563/mo
• Mortgage (P&I): −$1,463
• Tax + insurance: −$357
• HOA: −$0
• Vac / Maint / Mgmt: −$328
• Net cashflow: $-586/mo
• Annual: $-7,033/yr
• Cap rate: 3.77%
• Cash-on-cash: -9.00%
• DSCR: 0.60
• 1% rule: 0.56%
• Cash to close: $78,120

Investor read

• This is a 3-bed/1.0-bath single-family listed at $279k.
• At list price, monthly cash flow is $-586 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $175k (37.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $156k (44.0% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $156k (44.0% 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 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Jefferson Elementary (math 61% / reading 70%, grade B+, #123 of 857 statewide, top 15%, 525 students, 36% FRL); Kellogg Middle (math 42% / reading 53%, grade C-, #93 of 258 statewide, top 37%, 856 students, 43% FRL); Century Senior High (math 37% / reading 67%, grade D+, #111 of 471 statewide, top 26%, 1,698 students, 31% FRL).
• Watch-outs: built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.2%/yr); 222 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 18y 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 $185k; list at $279k implies a 50% gain — meaningful room to come down on a strong offer.

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 1951 — 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 A-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.