402 N Main St

Lake Crystal, MN 56055

$98,000B+

2 bd · 1.0 ba · 739 sqft · Built 1900 · SingleFamily · Pending · 243 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,222/mo
• Mortgage (P&I): −$514
• Tax + insurance: −$88
• HOA: −$0
• Vac / Maint / Mgmt: −$257
• Net cashflow: $363/mo
• Annual: $4,352/yr
• Cap rate: 10.73%
• Cash-on-cash: 15.86%
• DSCR: 1.71
• 1% rule: 1.25%
• Cash to close: $27,440

Investor read

• This is a 2-bed/1.0-bath single-family listed at $98k.
• At list price, monthly cash flow is $363 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $98k).
• It's been on market 243 days — a 12% lower offer ($86k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $86k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $678 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#227 in MN, #4,821 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Lake Crystal-Wellcome Memorial (rural): math 57% / reading 55% proficiency, ranked #60 of 301 in MN (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 19 active listings in the ZIP; 269 units permitted in Blue Earth County in 2024 (154 in 5+ unit buildings).
• Blue Earth County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 20y 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 $65k; list at $98k implies a 51% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $27k cash investment doubles in ~8 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 243 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.