2620 Kentucky Ave S

St. Louis Park, MN 55426

$225,000D+

3 bd · 1.5 ba · 1,440 sqft · Built 1951 · Other · Pending · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,097/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$455
• HOA: −$0
• Vac / Maint / Mgmt: −$440
• Net cashflow: $22/mo
• Annual: $259/yr
• Cap rate: 6.41%
• Cash-on-cash: 0.41%
• DSCR: 1.02
• 1% rule: 0.93%
• Cash to close: $63,000

Investor read

• This is a 3-bed/1.5-bath other listed at $225k.
• At list price, monthly cash flow is $22 ($259/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 $210k (6.8% below list).
• It's been on market 38 days — a 3% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $210k (6.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• St. Louis Park Public School District (suburban): math 45% / reading 55% proficiency, ranked #100 of 301 in MN (top 33%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.9%/yr); 138 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 sale attempts since 34y 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.
• Cap rate 6.4% vs local median 3.1% in St. Louis Park — 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

• It's been on market 38 days. Have you received any prior offers? Is the seller open to a 7% concession, seller financing, or rate buy-down credit?
• Built in 1951 — 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.