720 10th Ave SE

Rochester, MN 55904

$249,900D

4 bd · 2.5 ba · 1,289 sqft · Built 1938 · SingleFamily · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,893/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$376
• HOA: −$0
• Vac / Maint / Mgmt: −$397
• Net cashflow: $-191/mo
• Annual: $-2,291/yr
• Cap rate: 5.38%
• Cash-on-cash: -3.27%
• DSCR: 0.85
• 1% rule: 0.76%
• Cash to close: $69,972

Investor read

• This is a 4-bed/2.5-bath single-family listed at $250k.
• At list price, monthly cash flow is $-191 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $216k (13.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $189k (24.3% below list).
• It's been on market 33 days — a 3% lower offer ($242k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $189k (24.3% 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 $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: Riverside Central Elementary (math 12% / reading 22%, grade F, #771 of 857 statewide, top 91%, 417 students, 79% FRL); Mayo Senior High (math 42% / reading 65%, grade C-, #104 of 471 statewide, top 22%, 1,862 students, 31% FRL) — zoned schools average 55% FRL vs 31% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.1%/yr); 149 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 8 sale attempts since 19y 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.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% 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.

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?
• It's been on market 33 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• Built in 1938 — 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.