3328 5th Ave S

Minneapolis, MN 55408

$275,000C+

6 bd · 2.0 ba · 1,988 sqft · Built 1906 · Other · Active · 88 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,194/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$472
• HOA: −$0
• Vac / Maint / Mgmt: −$671
• Net cashflow: $609/mo
• Annual: $7,305/yr
• Cap rate: 8.95%
• Cash-on-cash: 9.49%
• DSCR: 1.42
• 1% rule: 1.16%
• Cash to close: $77,000

Investor read

• This is a 6-bed/2.0-bath other listed at $275k.
• At list price, monthly cash flow is $609 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $275k).
• It's been on market 88 days — a 6% lower offer ($258k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $258k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1906 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.8%/yr); 175 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 9 sale attempts since 19y ago; this cycle's ask has dropped $50k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $117k; list at $275k implies a 135% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.8% rent growth), your $77k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.9% vs local median 3.1% in Minneapolis — 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.
• At $3,194/mo this rent would consume 54% of the median local household income ($70k/yr) (locally 2619% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 88 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1906 — 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.
• Crime grade is F 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.
• 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.