21 23rd St SW

Rochester, MN 55902

$299,900D

3 bd · 2.0 ba · 2,128 sqft · Built 1985 · SingleFamily · Active · 78 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,365/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$485
• HOA: −$0
• Vac / Maint / Mgmt: −$497
• Net cashflow: $-190/mo
• Annual: $-2,277/yr
• Cap rate: 5.53%
• Cash-on-cash: -2.71%
• DSCR: 0.88
• 1% rule: 0.79%
• Cash to close: $83,972

Investor read

• This is a 3-bed/2.0-bath single-family listed at $300k.
• At list price, monthly cash flow is $-190 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $266k (11.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $237k (21.1% below list).
• It's been on market 78 days — a 6% lower offer ($282k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $237k (21.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+1.6%/yr); 387 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 15y ago; this cycle's ask has dropped $40k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $198k; list at $300k implies a 51% gain — meaningful room to come down on a strong offer.
• Cap rate 5.5% vs local median 3.5% in Rochester — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

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?
• It's been on market 78 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• 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 A-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.