706 Southhaven Dr

Mankato, MN 56001

$75,000B

3 bd · 2.0 ba · 1,050 sqft · Built 1986 · Other · Pending · 136 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,771/mo
• Mortgage (P&I): −$393
• Tax + insurance: −$125
• HOA: −$0
• Vac / Maint / Mgmt: −$372
• Net cashflow: $881/mo
• Annual: $10,574/yr
• Cap rate: 20.39%
• Cash-on-cash: 50.35%
• DSCR: 3.24
• 1% rule: 2.36%
• Cash to close: $21,000

Investor read

• This is a 3-bed/2.0-bath other listed at $75k.
• At list price, monthly cash flow is $881 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $75k).
• It's been on market 136 days — a 12% lower offer ($66k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $66k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $519 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#133 in MN, #2,970 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A; Watch: crime C-, amenities C-, commute F.
• Mankato Public School District (urban): math 48% / reading 56% proficiency, ranked #98 of 301 in MN (top 33%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+8.6%/yr); 352 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 269 units permitted in Blue Earth County in 2024 (154 in 5+ unit buildings).
• Blue Earth County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $21k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 20.4% vs local median 3.4% in Mankato — 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.
• This rent runs 31% of the median local income ($70k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 136 days. Have you received any prior offers? Is the seller open to a 12% 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 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.