1011 6th Ave

Mountain Lake, MN 56159

$99,000B

3 bd · 1.0 ba · 1,608 sqft · Built 1918 · SingleFamily · Active · 304 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,214/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$234
• HOA: −$0
• Vac / Maint / Mgmt: −$255
• Net cashflow: $206/mo
• Annual: $2,474/yr
• Cap rate: 8.79%
• Cash-on-cash: 8.93%
• DSCR: 1.40
• 1% rule: 1.23%
• Cash to close: $27,720

Investor read

• This is a 3-bed/1.0-bath single-family listed at $99k.
• At list price, monthly cash flow is $206 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $99k).
• It's been on market 304 days — a 12% lower offer ($87k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $87k (12.0% below list) — sets the bar for market timing.
• In year one you build about $820 of equity ($684 loan paydown + $136 appreciation (0.1% local appreciation)).
• Location reads 74/100 on livability (#226 in MN, #4,819 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Mountain Lake Public Schools (rural): math 46% / reading 46% proficiency, ranked #172 of 301 in MN (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mountain Lake Elementary (math 37% / reading 42%, grade F, #604 of 857 statewide, top 74%, 257 students, 66% FRL); Mountain Lake Secondary (math 57% / reading 52%, grade C-, #87 of 471 statewide, top 22%, 244 students, 57% FRL) — zoned schools average 62% FRL vs 39% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1918 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 19 active listings in the ZIP; 29 units permitted in Cottonwood County in 2024 (15 in 5+ unit buildings).
• Cottonwood County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 5y ago; this cycle's ask has dropped $36k (27%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $68k; 47% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (0.1% appreciation + 3.0% rent growth), your $28k cash investment doubles in ~7 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 304 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1918 — 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.