508 E Iowa St

Elmore, MN 56027

$79,000B

4 bd · 1.5 ba · 1,569 sqft · Built 1890 · Other · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,258/mo
• Mortgage (P&I): −$414
• Tax + insurance: −$165
• HOA: −$0
• Vac / Maint / Mgmt: −$264
• Net cashflow: $414/mo
• Annual: $4,974/yr
• Cap rate: 12.59%
• Cash-on-cash: 22.49%
• DSCR: 2.00
• 1% rule: 1.59%
• Cash to close: $22,120

Investor read

• This is a 4-bed/1.5-bath other listed at $79k.
• At list price, monthly cash flow is $414 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $79k).
• It's been on market 27 days — a 2% lower offer ($78k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $78k (1.5% below list) — sets the bar for market timing.
• In year one you build about $3k of equity ($546 loan paydown + $2k appreciation (2.7% local appreciation)).
• Location reads 61/100 on livability (#749 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, health & safety C-, schools 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 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 2 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.
• 2 sale attempts since 14y 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 $18k; list at $79k implies a 327% gain — meaningful room to come down on a strong offer.
• At projected returns (2.7% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~3 years — after that, you're playing with house money.

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 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?
• 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.