24942 County Highway 6

Detroit Lakes, MN 56501

$269,900B-

2 bd · 1.0 ba · 1,196 sqft · Built 1977 · SingleFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,160/mo
• Mortgage (P&I): −$1,415
• Tax + insurance: −$245
• HOA: −$0
• Vac / Maint / Mgmt: −$664
• Net cashflow: $836/mo
• Annual: $10,034/yr
• Cap rate: 10.01%
• Cash-on-cash: 13.28%
• DSCR: 1.59
• 1% rule: 1.17%
• Cash to close: $75,572

Investor read

• This is a 2-bed/1.0-bath single-family listed at $270k.
• At list price, monthly cash flow is $836 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $270k).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#78 in MN, #1,847 nationally) — a professional / high-income tenant draw. Strengths: housing A+, health & safety A+, cost of living A; Watch: amenities F, commute F.
• Detroit Lakes Public School District (town): math 44% / reading 50% proficiency, ranked #155 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 307 active listings in the ZIP; 156 units permitted in Becker County in 2024 (0 in 5+ unit buildings).
• Becker County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 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.
• Current owner paid $169k; list at $270k implies a 60% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $76k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.0% vs local median 5.2% in Detroit Lakes — 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 1977 — 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?
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?
• 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.