823 NW 5th St

Grand Rapids, MN 55744

$90,000B-

3 bd · None ba · 676 sqft · Built 1930 · SingleFamily · Active · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,250/mo
• Mortgage (P&I): −$472
• Tax + insurance: −$110
• HOA: −$0
• Vac / Maint / Mgmt: −$262
• Net cashflow: $405/mo
• Annual: $4,862/yr
• Cap rate: 11.70%
• Cash-on-cash: 19.30%
• DSCR: 1.86
• 1% rule: 1.39%
• Cash to close: $25,200

Investor read

• This is a 3-bed/?-bath single-family listed at $90k.
• At list price, monthly cash flow is $405 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $90k).
• It's been on market 24 days — a 2% lower offer ($89k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $622 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#81 in MN, #1,911 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: employment C-, commute F.
• Grand Rapids Public School District (town): math 46% / reading 55% proficiency, ranked #119 of 301 in MN (top 40%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 107 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 121 units permitted in Itasca County in 2024 (0 in 5+ unit buildings).
• Itasca County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.7% vs local median 3.0% in Grand Rapids — 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 1930 — 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.