405 E 8th St

Blue Earth, MN 56013

$99,999B-

3 bd · 2.0 ba · 1,403 sqft · Built 1880 · Other · Active · 45 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,153/mo
• Mortgage (P&I): −$524
• Tax + insurance: −$191
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $195/mo
• Annual: $2,341/yr
• Cap rate: 8.63%
• Cash-on-cash: 8.36%
• DSCR: 1.37
• 1% rule: 1.15%
• Cash to close: $28,000

Investor read

• This is a 3-bed/2.0-bath other listed at $100k.
• At list price, monthly cash flow is $195 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $100k).
• It's been on market 45 days — a 3% lower offer ($97k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $97k (3.0% below list) — sets the bar for market timing.
• In year one you build about $11k of equity ($691 loan paydown + $10k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#259 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, amenities F, commute F.
• Blue Earth Area Public School (town): math 29% / reading 44% proficiency, ranked #245 of 301 in MN (top 81%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1880 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 36 active listings in the ZIP; 4 units permitted in Faribault County in 2024 (0 in 5+ unit buildings).
• Faribault County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 19y 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 $57k; list at $100k implies a 75% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $28k cash investment doubles in ~3 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

• It's been on market 45 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1880 — 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.