702 4th St SE

Pipestone, MN 56164

$139,900D

4 bd · 2.0 ba · 1,813 sqft · Built 1908 · SingleFamily · Active · 139 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,121/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$226
• HOA: −$0
• Vac / Maint / Mgmt: −$235
• Net cashflow: $-74/mo
• Annual: $-886/yr
• Cap rate: 5.66%
• Cash-on-cash: -2.26%
• DSCR: 0.90
• 1% rule: 0.80%
• Cash to close: $39,172

Investor read

• This is a 4-bed/2.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $-74 ($-886/yr) — negative.
• To cash-flow at today's rent, offer at most $127k (9.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $112k (19.9% below list).
• It's been on market 139 days — a 12% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (19.9% below list) — sets the bar for 1% rule.
• 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 72/100 on livability (#268 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment D, amenities F, commute F.
• Pipestone Area School District (town): math 36% / reading 42% proficiency, ranked #233 of 301 in MN (top 77%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Pipestone Elementary (math 57% / reading 47%, grade C-, #368 of 857 statewide, top 47%, 519 students, 54% FRL); Pipestone Middle (math 28% / reading 43%, grade F, #172 of 258 statewide, top 68%, 234 students, 49% FRL); Pipestone Senior High (math 27% / reading 27%, grade F, #369 of 471 statewide, top 79%, 340 students, 39% FRL).
• Watch-outs: built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 45 active listings in the ZIP; 8 units permitted in Pipestone County in 2024 (0 in 5+ unit buildings).
• Pipestone County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 8y 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.
• Current owner paid $82k; list at $140k implies a 72% gain — meaningful room to come down on a strong offer.
• Cap rate 5.7% vs local median 2.3% in Pipestone — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 139 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1908 — 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.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.