224 Ave A

Cloquet, MN 55720

$599,900C+

77 bd · 121.0 ba · 4,752 sqft · Built 1920 · MultiFamily · Pending · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,499/mo
• Mortgage (P&I): −$3,146
• Tax + insurance: −$759
• HOA: −$0
• Vac / Maint / Mgmt: −$2,835
• Net cashflow: $6,759/mo
• Annual: $81,112/yr
• Cap rate: 19.81%
• Cash-on-cash: 48.29%
• DSCR: 3.15
• 1% rule: 2.25%
• Cash to close: $167,972

Investor read

• This is a 11 × 7-bed/11.0-bath units multifamily listed at $600k.
• At list price, monthly cash flow is $7k ($81k/yr) — positive. Per door: $614/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($13k rent vs $600k).
• It's been on market 55 days — a 3% lower offer ($582k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $582k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#413 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, health & safety D, amenities F.
• Cloquet Public School District (town): math 41% / reading 56% proficiency, ranked #140 of 301 in MN (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 87 active listings in the ZIP; 126 units permitted in Carlton County in 2024 (22 in 5+ unit buildings).
• Carlton County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $168k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 19.8% vs local median 3.0% in Cloquet — 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

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1920 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.