5428 5th St NE

Fridley, MN 55421

$575,000D

7 bd · 16.0 ba · 2,873 sqft · Built 1961 · MultiFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,260/mo
• Mortgage (P&I): −$3,015
• Tax + insurance: −$1,051
• HOA: −$0
• Vac / Maint / Mgmt: −$1,105
• Net cashflow: $89/mo
• Annual: $1,063/yr
• Cap rate: 6.48%
• Cash-on-cash: 0.66%
• DSCR: 1.03
• 1% rule: 0.91%
• Cash to close: $161,000

Investor read

• This is a 3×2bd/1ba + 1×1bd/1ba units multifamily listed at $575k.
• At list price, monthly cash flow is $89 ($1k/yr) — positive. Per door: $22/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $526k (8.5% below list).
• It's been on market 20 days — a 2% lower offer ($566k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $526k (8.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#185 in MN, #3,977 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, employment B+; Watch: crime C-, amenities F, health & safety F.
• Fridley Public School District (suburban): math 27% / reading 35% proficiency, ranked #265 of 301 in MN (top 88%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Stevenson Elementary (math 22% / reading 22%, grade F, #732 of 857 statewide, top 88%, 447 students, 76% FRL); Fridley Middle (math 22% / reading 42%, grade F, #188 of 258 statewide, top 73%, 745 students, 76% FRL); Fridley Senior High (math 27% / reading 47%, grade F, #282 of 471 statewide, top 63%, 854 students, 75% FRL) — zoned schools average 76% FRL vs 50% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+4.5%/yr); 145 active listings in the ZIP; 1,083 units permitted in Anoka County in 2024 (134 in 5+ unit buildings).
• Anoka County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 15 sale attempts since 26y 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.
• Cap rate 6.5% vs local median 3.2% in Fridley — 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 $5,260/mo this rent would consume 89% of the median local household income ($71k/yr) (locally 1747% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1961 — 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.