418 8th St

Red Wing, MN 55066

$229,900D

4 bd · 2.0 ba · 1,449 sqft · Built 1880 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,996/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$273
• HOA: −$0
• Vac / Maint / Mgmt: −$419
• Net cashflow: $98/mo
• Annual: $1,181/yr
• Cap rate: 6.81%
• Cash-on-cash: 1.83%
• DSCR: 1.08
• 1% rule: 0.87%
• Cash to close: $64,372

Investor read

• This is a 4-bed/2.0-bath single-family listed at $230k.
• At list price, monthly cash flow is $98 ($1k/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 $200k (13.2% below list).
• It's been on market 21 days — a 2% lower offer ($226k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $200k (13.2% 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 81/100 on livability (#64 in MN, #1,570 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D.
• Red Wing Public School District (rural): math 36% / reading 44% proficiency, ranked #220 of 301 in MN (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Burnside Elementary (math 47% / reading 50%, grade D, #480 of 857 statewide, top 56%, 522 students, 42% FRL); Twin Bluff School (math 40% / reading 40%, grade F, #147 of 258 statewide, top 57%, 534 students, 37% FRL); Red Wing Senior High (math 31% / reading 44%, grade F, #280 of 471 statewide, top 59%, 866 students, 37% FRL).
• Watch-outs: built in 1880 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 141 active listings in the ZIP; 86 units permitted in Goodhue County in 2024 (0 in 5+ unit buildings).
• Goodhue County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $124k; list at $230k implies a 85% gain — meaningful room to come down on a strong offer.
• Cap rate 6.8% vs local median 3.5% in Red Wing — 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 33% of the median local income ($74k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1880 — 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.