108 1st St S

Nerstrand, MN 55053

$139,900C

4 bd · 1.0 ba · 1,257 sqft · Built 1900 · SingleFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,585/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$171
• HOA: −$0
• Vac / Maint / Mgmt: −$333
• Net cashflow: $348/mo
• Annual: $4,173/yr
• Cap rate: 9.28%
• Cash-on-cash: 10.65%
• DSCR: 1.47
• 1% rule: 1.13%
• Cash to close: $39,172

Investor read

• This is a 4-bed/1.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $348 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $140k).
• It's been on market 17 days — a 2% lower offer ($138k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $138k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $967 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#465 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B; Watch: amenities F, commute F, health & safety D-.
• Faribault Public School District (town): math 17% / reading 34% proficiency, ranked #275 of 301 in MN (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 93 units permitted in Rice County in 2024 (0 in 5+ unit buildings).

Questions for listing agent

• Built in 1900 — 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.
• 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.