509 N 21st Ave Ave W

Duluth, MN 55806

$120,000B+

3 bd · 1.0 ba · 1,176 sqft · Built 1909 · SingleFamily · Active · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,943/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$166
• HOA: −$0
• Vac / Maint / Mgmt: −$408
• Net cashflow: $740/mo
• Annual: $8,874/yr
• Cap rate: 13.69%
• Cash-on-cash: 26.41%
• DSCR: 2.18
• 1% rule: 1.62%
• Cash to close: $33,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $740 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $120k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $830 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#36 in MN, #1,060 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Duluth Public School District (urban): math 44% / reading 55% proficiency, ranked #132 of 301 in MN (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1909 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 44 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 56% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 5 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.
• Current owner paid $75k; list at $120k implies a 60% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.7% vs local median 4.9% in Duluth — 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.
• At $1,943/mo this rent would consume 54% of the median local household income ($43k/yr) (locally 506% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1909 — 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?
• 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.