608 N 5th St

Bricelyn, MN 56014

$42,000B+

2 bd · 1.0 ba · 936 sqft · Built 1938 · Other · Pending · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $879/mo
• Mortgage (P&I): −$220
• Tax + insurance: −$70
• HOA: −$0
• Vac / Maint / Mgmt: −$185
• Net cashflow: $405/mo
• Annual: $4,854/yr
• Cap rate: 17.85%
• Cash-on-cash: 41.28%
• DSCR: 2.84
• 1% rule: 2.09%
• Cash to close: $11,760

Investor read

• This is a 2-bed/1.0-bath other listed at $42k.
• At list price, monthly cash flow is $405 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($879 rent vs $42k).
• It's been on market 49 days — a 3% lower offer ($41k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $41k (3.0% below list) — sets the bar for market timing.
• In year one you build about $1k of equity ($290 loan paydown + $842 appreciation (2.0% local appreciation)).
• Location reads 62/100 on livability (#675 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+; Watch: schools F, crime D-, amenities F.
• United South Central School District (rural): math 46% / reading 53% proficiency, ranked #130 of 301 in MN (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1938 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 4 active listings in the ZIP; 4 units permitted in Faribault County in 2024 (0 in 5+ unit buildings).
• Faribault County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 5y ago; this cycle's ask has dropped $3k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (2.0% appreciation + 3.0% rent growth), your $12k cash investment doubles in ~2 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 49 days. Have you received any prior offers? Is the seller open to a 3% 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 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?
• 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.