404 SE Pleasant St

Brownsdale, MN 55918

$45,000B+

2 bd · 1.0 ba · 672 sqft · Built 1946 · Other · Pending · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $818/mo
• Mortgage (P&I): −$236
• Tax + insurance: −$111
• HOA: −$0
• Vac / Maint / Mgmt: −$172
• Net cashflow: $299/mo
• Annual: $3,588/yr
• Cap rate: 14.27%
• Cash-on-cash: 28.47%
• DSCR: 2.27
• 1% rule: 1.82%
• Cash to close: $12,600

Investor read

• This is a 2-bed/1.0-bath other listed at $45k.
• 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 ($818 rent vs $45k).
• It's been on market 37 days — a 3% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (3.0% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($311 loan paydown + $4k appreciation (8.3% local appreciation)).
• Location reads 65/100 on livability (#558 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools D+, crime D+, amenities F.
• Hayfield Public School District (rural): math 29% / reading 38% proficiency, ranked #254 of 301 in MN (top 84%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 53 units permitted in Mower County in 2024 (0 in 5+ unit buildings).
• At projected returns (8.3% appreciation + 3.0% rent growth), your $13k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 8, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 37 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1946 — 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 D-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?
• 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.