110 1st St SW

Melrose, MN 56352

$99,900A-

4 bd · 2.0 ba · 1,585 sqft · Built 1890 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,730/mo
• Mortgage (P&I): −$524
• Tax + insurance: −$148
• HOA: −$0
• Vac / Maint / Mgmt: −$363
• Net cashflow: $694/mo
• Annual: $8,332/yr
• Cap rate: 14.63%
• Cash-on-cash: 29.79%
• DSCR: 2.33
• 1% rule: 1.73%
• Cash to close: $27,972

Investor read

• This is a 4-bed/2.0-bath single-family listed at $100k.
• At list price, monthly cash flow is $694 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $100k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $11k of equity ($691 loan paydown + $10k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#164 in MN, #3,568 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Melrose Public School District (rural): math 45% / reading 50% proficiency, ranked #142 of 301 in MN (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Melrose Elementary (math 55% / reading 44%, grade D, #423 of 857 statewide, top 55%, 471 students, 50% FRL); Melrose Middle (math 39% / reading 51%, grade D, #113 of 258 statewide, top 45%, 334 students, 44% FRL); Melrose Secondary (math 42% / reading 57%, grade D, #143 of 471 statewide, top 33%, 472 students, 40% FRL).
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 31 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 661 units permitted in Stearns County in 2024 (291 in 5+ unit buildings).
• Stearns County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 15y 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 $80k; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $28k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1890 — 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?
• 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.