405 S 4th St

Milan, MN 56262

$60,000B

3 bd · 2.0 ba · 1,050 sqft · Built 1928 · SingleFamily · Pending · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,050/mo
• Mortgage (P&I): −$315
• Tax + insurance: −$100
• HOA: −$0
• Vac / Maint / Mgmt: −$221
• Net cashflow: $415/mo
• Annual: $4,983/yr
• Cap rate: 14.60%
• Cash-on-cash: 29.66%
• DSCR: 2.32
• 1% rule: 1.75%
• Cash to close: $16,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $60k.
• At list price, monthly cash flow is $415 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $60k).
• It's been on market 16 days — a 2% lower offer ($59k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $59k (1.5% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($415 loan paydown + $2k appreciation (3.0% local appreciation)).
• Location reads 60/100 on livability (#769 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety D+, schools F, crime D-.
• Lac Qui Parle Valley School District (rural): math 44% / reading 44% proficiency, ranked #193 of 301 in MN (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 13 units permitted in Chippewa County in 2024 (0 in 5+ unit buildings).
• Chippewa County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $17k cash investment doubles in ~3 years — after that, you're playing with house money.

Questions for listing agent

• Built in 1928 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.