401 5th St S

Moorhead, MN 56560

$99,000B+

3 bd · 2.0 ba · 1,545 sqft · Built 1920 · SingleFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,688/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$428
• HOA: −$0
• Vac / Maint / Mgmt: −$355
• Net cashflow: $387/mo
• Annual: $4,639/yr
• Cap rate: 10.98%
• Cash-on-cash: 16.73%
• DSCR: 1.74
• 1% rule: 1.71%
• Cash to close: $27,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $99k.
• At list price, monthly cash flow is $387 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $99k).
• It's been on market 22 days — a 2% lower offer ($98k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $98k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $684 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#143 in MN, #3,111 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A-; Watch: crime C-, amenities F, commute F.
• Moorhead Public School District (suburban): math 39% / reading 46% proficiency, ranked #202 of 301 in MN (top 67%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 4.7% of price; built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.4%/yr); 390 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 269 units permitted in Clay County in 2024 (153 in 5+ unit buildings).
• Clay County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 1.4% rent growth), your $28k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 11.0% vs local median 3.7% in Moorhead — 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.

Questions for listing agent

• Built in 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.