723 E Hwy 14

Balaton, MN 56115

$215,500D

4 bd · 2.0 ba · 2,176 sqft · Built 1900 · SingleFamily · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,534/mo
• Mortgage (P&I): −$1,130
• Tax + insurance: −$269
• HOA: −$0
• Vac / Maint / Mgmt: −$322
• Net cashflow: $-187/mo
• Annual: $-2,244/yr
• Cap rate: 5.25%
• Cash-on-cash: -3.72%
• DSCR: 0.83
• 1% rule: 0.71%
• Cash to close: $60,340

Investor read

• This is a 4-bed/2.0-bath single-family listed at $216k.
• At list price, monthly cash flow is $-187 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $182k (15.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $153k (28.8% below list).
• It's been on market 30 days — a 2% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $153k (28.8% below list) — sets the bar for 1% rule.
• In year one you build about $23k of equity ($1k loan paydown + $22k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#477 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, amenities F, commute F.
• Zoned schools: Tracy Elementary (math 57% / reading 57%, grade C+, #265 of 857 statewide, top 35%, 327 students, 56% FRL); Tracy Secondary (math 42% / reading 57%, grade D, #143 of 471 statewide, top 33%, 330 students, 50% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 52 active listings in the ZIP; 91 units permitted in Lyon County in 2024 (72 in 5+ unit buildings).
• Lyon County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 10y 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 $78k; list at $216k implies a 178% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 1900 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.