23201 Grouse St

Palisade, MN 55760

$135,500C-

3 bd · 2.0 ba · 1,152 sqft · Built 1974 · Other · Pending · 104 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,091/mo
• Mortgage (P&I): −$711
• Tax + insurance: −$116
• HOA: −$0
• Vac / Maint / Mgmt: −$229
• Net cashflow: $34/mo
• Annual: $414/yr
• Cap rate: 6.60%
• Cash-on-cash: 1.09%
• DSCR: 1.05
• 1% rule: 0.80%
• Cash to close: $37,940

Investor read

• This is a 3-bed/2.0-bath other listed at $136k.
• At list price, monthly cash flow is $34 ($414/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $109k (19.5% below list).
• It's been on market 104 days — a 9% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $109k (19.5% below list) — sets the bar for 1% rule.
• In year one you build about $14k of equity ($937 loan paydown + $14k appreciation (10.0% local appreciation)).
• Location reads 64/100 on livability (#591 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+; Watch: schools D+, crime D, amenities F.
• Mcgregor Public School District (rural): math 31% / reading 44% proficiency, ranked #243 of 301 in MN (top 81%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 87 active listings in the ZIP; 134 units permitted in Aitkin County in 2024 (0 in 5+ unit buildings).
• Aitkin County population projected at -25% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 16y ago; this cycle's ask has dropped $68k (34%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $38k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 104 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.