1009 E Center St

Rochester, MN 55904

$219,000B-

4 bd · 2.0 ba · 744 sqft · Built 1910 · MultiFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,768/mo
• Mortgage (P&I): −$1,148
• Tax + insurance: −$353
• HOA: −$0
• Vac / Maint / Mgmt: −$581
• Net cashflow: $686/mo
• Annual: $8,228/yr
• Cap rate: 10.05%
• Cash-on-cash: 13.42%
• DSCR: 1.60
• 1% rule: 1.26%
• Cash to close: $61,320

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $219k.
• At list price, monthly cash flow is $686 ($8k/yr) — positive. Per door: $343/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $219k).
• It's been on market 55 days — a 3% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $212k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k 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: Lincoln K-8 District-Wide School (math 60% / reading 64%, grade B, #180 of 857 statewide, top 23%, 469 students, 14% 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) — zoned schools at 30% FRL track the district average.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.1%/yr); 155 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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 20y 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 $128k; list at $219k implies a 70% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 2.1% rent growth), your $61k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 10.1% vs local median 3.5% in Rochester — 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.
• This rent runs 43% of the median local income ($77k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1910 — 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?
• 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.