3837 France Ave S

Minneapolis, MN 55416

$499,900C

4 bd · 2.0 ba · 1,920 sqft · Built 1957 · SingleFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,979/mo
• Mortgage (P&I): −$2,622
• Tax + insurance: −$765
• HOA: −$0
• Vac / Maint / Mgmt: −$1,046
• Net cashflow: $546/mo
• Annual: $6,556/yr
• Cap rate: 7.60%
• Cash-on-cash: 4.68%
• DSCR: 1.21
• 1% rule: 1.00%
• Cash to close: $139,972

Investor read

• This is a 4-bed/2.0-bath single-family listed at $500k.
• At list price, monthly cash flow is $546 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $498k (0.4% below list).
• It's been on market 21 days — a 2% lower offer ($492k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $492k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k 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 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.3%/yr); 205 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 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.
• 4 sale attempts since 23y ago; this cycle's ask is 33% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $375k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.6% 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 $4,979/mo this rent would consume 56% of the median local household income ($106k/yr) (locally 1213% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1957 — 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.
• 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.