821 William St

Hamburg, MN 55339

$225,000D

4 bd · 2.0 ba · 2,062 sqft · Built 1972 · SingleFamily · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,632/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$386
• HOA: −$0
• Vac / Maint / Mgmt: −$343
• Net cashflow: $-276/mo
• Annual: $-3,315/yr
• Cap rate: 4.82%
• Cash-on-cash: -5.26%
• DSCR: 0.77
• 1% rule: 0.73%
• Cash to close: $63,000

Investor read

• This is a 4-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-276 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $176k (21.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $163k (27.5% below list).
• It's been on market 20 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (27.5% below list) — sets the bar for 1% rule.
• In year one you build about $24k of equity ($2k loan paydown + $22k appreciation (10.0% local appreciation)).
• Location reads 64/100 on livability (#609 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment B+; Watch: schools C-, amenities F, commute F.
• Central Public School District (town): math 43% / reading 56% proficiency, ranked #102 of 301 in MN (top 34%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 17% free/reduced lunch — higher-income household profile.
• Market conditions: 9 active listings in the ZIP; 682 units permitted in Carver County in 2024 (6 in 5+ unit buildings).
• Carver County population projected at +29% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 16y 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 $119k; list at $225k implies a 89% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• Built in 1972 — 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.