525 Nelson St NE

Warroad, MN 56763

$805,000A-

36 bd · 25.2 ba · 19,140 sqft · Built 1983 · MultiFamily · Active · 311 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,302/mo
• Mortgage (P&I): −$4,222
• Tax + insurance: −$1,342
• HOA: −$0
• Vac / Maint / Mgmt: −$3,843
• Net cashflow: $8,895/mo
• Annual: $106,745/yr
• Cap rate: 19.55%
• Cash-on-cash: 47.36%
• DSCR: 3.11
• 1% rule: 2.27%
• Cash to close: $225,400

Investor read

• This is a 18 × 2-bed/1.4-bath units multifamily listed at $805k. Condition is rated fair.
• At list price, monthly cash flow is $9k ($107k/yr) — positive. Per door: $494/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $805k).
• It's been on market 311 days — a 12% lower offer ($708k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $708k (12.0% below list) — sets the bar for market timing.
• In year one you build about $86k of equity ($6k loan paydown + $80k appreciation (10.0% local appreciation)).
• Location reads 75/100 on livability (#201 in MN, #4,214 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Warroad Public School District (rural): math 42% / reading 53% proficiency, ranked #153 of 301 in MN (top 51%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 39 active listings in the ZIP; 49 units permitted in Roseau County in 2024 (15 in 5+ unit buildings).
• Roseau County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $225k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$138k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 311 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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 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.

Repairs flagged (vision-AI assessment)

• Moderate: kitchen cabinets — dated and worn
• Moderate: bathroom fixtures — dated and worn
• Minor: HVAC system — no visible damage