15625 540th Ave

Austin, MN 55912

$139,900C+

3 bd · 2.0 ba · 1,692 sqft · Built 1965 · SingleFamily · Pending · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,503/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$154
• HOA: −$0
• Vac / Maint / Mgmt: −$316
• Net cashflow: $299/mo
• Annual: $3,594/yr
• Cap rate: 8.86%
• Cash-on-cash: 9.17%
• DSCR: 1.41
• 1% rule: 1.07%
• Cash to close: $39,172

Investor read

• This is a 3-bed/2.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $299 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $140k).
• It's been on market 44 days — a 3% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $136k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $967 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#77 in MN, #1,829 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, commute F.
• Austin Public School District (town): math 24% / reading 34% proficiency, ranked #267 of 301 in MN (top 89%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: Rents rising fast (+11.6%/yr); 188 active listings in the ZIP; 53 units permitted in Mower County in 2024 (0 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $39k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 8.9% vs local median 4.5% in Austin — 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

• It's been on market 44 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1965 — 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.
• 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.