45 W Chapman St

Ely, MN 55731

$125,000C+

4 bd · 2.0 ba · 1,274 sqft · Built 1902 · Other · Pending · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,376/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$209
• HOA: −$0
• Vac / Maint / Mgmt: −$289
• Net cashflow: $222/mo
• Annual: $2,669/yr
• Cap rate: 8.43%
• Cash-on-cash: 7.63%
• DSCR: 1.34
• 1% rule: 1.10%
• Cash to close: $35,000

Investor read

• This is a 4-bed/2.0-bath other listed at $125k.
• At list price, monthly cash flow is $222 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $125k).
• It's been on market 19 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#128 in MN, #2,900 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Ely Public School District (town): math 37% / reading 56% proficiency, ranked #175 of 301 in MN (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1902 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 129 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 3 sale attempts since 14y 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 $105k; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 1.5% in Ely — 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.

Questions for listing agent

• Built in 1902 — 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.
• 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.