607 Saint Johns Ave

Red Lake Falls, MN 56750

$122,400C

2 bd · 2.0 ba · 1,300 sqft · Built 1939 · SingleFamily · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,233/mo
• Mortgage (P&I): −$642
• Tax + insurance: −$200
• HOA: −$0
• Vac / Maint / Mgmt: −$259
• Net cashflow: $133/mo
• Annual: $1,594/yr
• Cap rate: 7.60%
• Cash-on-cash: 4.65%
• DSCR: 1.21
• 1% rule: 1.01%
• Cash to close: $34,272

Investor read

• This is a 2-bed/2.0-bath single-family listed at $122k.
• At list price, monthly cash flow is $133 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $122k).
• It's been on market 70 days — a 6% lower offer ($115k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $846 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#142 in MN, #3,078 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Red Lake Falls Public School District (rural): math 46% / reading 48% proficiency, ranked #156 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: J.A. Hughes Elementary (math 52% / reading 42%, grade D-, #492 of 857 statewide, top 61%, 222 students, 43% FRL); Lafayette Secondary (math 37% / reading 52%, grade F, #189 of 471 statewide, top 44%, 162 students, 32% FRL).
• Watch-outs: built in 1939 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 2 units permitted in Red Lake County in 2024 (0 in 5+ unit buildings).
• Red Lake County population projected at -13% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts; this cycle's ask has dropped $22k (16%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $75k; list at $122k implies a 63% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• It's been on market 70 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1939 — 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 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.