3928 State Highway 200

Gary, MN 56545

$149,900C-

4 bd · 1.0 ba · 1,344 sqft · Built 1930 · Other · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,292/mo
• Mortgage (P&I): −$786
• Tax + insurance: −$137
• HOA: −$0
• Vac / Maint / Mgmt: −$271
• Net cashflow: $97/mo
• Annual: $1,169/yr
• Cap rate: 7.07%
• Cash-on-cash: 2.79%
• DSCR: 1.12
• 1% rule: 0.86%
• Cash to close: $41,972

Investor read

• This is a 4-bed/1.0-bath other listed at $150k.
• At list price, monthly cash flow is $97 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $129k (13.8% below list).
• It's been on market 38 days — a 3% lower offer ($145k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $129k (13.8% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($1k loan paydown + $4k appreciation (3.0% local appreciation)).
• Location reads 76/100 on livability (#153 in MN, #3,387 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities F, commute F.
• Norman County East School District (rural): math 55% / reading 50% proficiency, ranked #265 of 467 in MN (top 57%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 6 active listings in the ZIP; 8 units permitted in Norman County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $10k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $100k; 50% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $42k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 38 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• Built in 1930 — 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 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.