506 Midway Ave

Proctor, MN 55810

$170,000D+

4 bd · 2.0 ba · 1,050 sqft · Built 1916 · Other · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,349/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$202
• HOA: −$0
• Vac / Maint / Mgmt: −$283
• Net cashflow: $-28/mo
• Annual: $-342/yr
• Cap rate: 6.09%
• Cash-on-cash: -0.72%
• DSCR: 0.97
• 1% rule: 0.79%
• Cash to close: $47,600

Investor read

• This is a 4-bed/2.0-bath other listed at $170k.
• At list price, monthly cash flow is $-28 ($-342/yr) — negative.
• To cash-flow at today's rent, offer at most $165k (3.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $135k (20.7% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $135k (20.7% below list) — sets the bar for 1% rule.
• In year one you build about $18k of equity ($1k loan paydown + $17k appreciation (10.0% local appreciation)).
• Location reads 75/100 on livability (#184 in MN, #3,966 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+, cost of living A+; Watch: health & safety D, amenities F.
• Proctor Public School District (suburban): math 39% / reading 49% proficiency, ranked #177 of 301 in MN (top 59%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Bay View Elementary (math 52% / reading 52%, grade C-, #368 of 857 statewide, top 47%, 588 students, 42% FRL); A.I. Jedlicka Middle School (math 21% / reading 39%, grade F, #199 of 258 statewide, top 78%, 448 students, 42% FRL); Proctor Senior High (math 42% / reading 67%, grade C-, #87 of 471 statewide, top 22%, 551 students, 36% FRL) — zoned schools average 40% FRL vs 22% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1916 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 51 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• At projected returns (10.0% appreciation + 3.0% rent growth), your $48k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$46k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• Built in 1916 — 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 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?
• 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.