25576 5th St W

Zimmerman, MN 55398

$270,000D-

3 bd · 2.0 ba · 1,466 sqft · Built 2021 · Townhouse · Active · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,097/mo
• Mortgage (P&I): −$1,416
• Tax + insurance: −$188
• HOA: −$350
• Vac / Maint / Mgmt: −$440
• Net cashflow: $-297/mo
• Annual: $-3,563/yr
• Cap rate: 4.97%
• Cash-on-cash: -4.71%
• DSCR: 0.79
• 1% rule: 0.78%
• Cash to close: $75,600

Investor read

• This is a 3-bed/2.0-bath townhouse listed at $270k.
• At list price, monthly cash flow is $-297 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $218k (19.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $210k (22.3% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $210k (22.3% 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 $8k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#134 in MN, #3,004 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Independent School District 728 (suburban): math 56% / reading 60% proficiency, ranked #37 of 301 in MN (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Market conditions: 180 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 334 units permitted in Sherburne County in 2024 (58 in 5+ unit buildings).
• 3 sale attempts since 3y ago; this cycle's ask has dropped $35k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.0% vs local median 3.2% in Zimmerman — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.