703 N 1st St

Montevideo, MN 56265

$119,900D+

4 bd · 2.0 ba · 1,887 sqft · Built 1887 · SingleFamily · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,189/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$272
• HOA: −$0
• Vac / Maint / Mgmt: −$250
• Net cashflow: $38/mo
• Annual: $460/yr
• Cap rate: 6.68%
• Cash-on-cash: 1.37%
• DSCR: 1.06
• 1% rule: 0.99%
• Cash to close: $33,572

Investor read

• This is a 4-bed/2.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $38 ($460/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 $119k (0.9% below list).
• It's been on market 16 days — a 2% lower offer ($118k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $118k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $829 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#101 in MN, #2,281 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• Montevideo Public School District (town): math 44% / reading 50% proficiency, ranked #159 of 301 in MN (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ramsey Elementary (math 47% / reading 42%, grade F, #534 of 857 statewide, top 66%, 338 students, 60% FRL); Montevideo Middle (math 46% / reading 51%, grade C-, #87 of 258 statewide, top 34%, 432 students, 58% FRL); Montevideo Senior High (math 42% / reading 52%, grade D-, #166 of 471 statewide, top 39%, 386 students, 47% FRL) — zoned schools average 55% FRL vs 30% district-wide (26 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1887 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 87 active listings in the ZIP; 13 units permitted in Chippewa County in 2024 (0 in 5+ unit buildings).
• Chippewa County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 9 sale attempts since 14y 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 $102k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.7% vs local median 3.5% in Montevideo — 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 1887 — 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.