5940 Fernwood St

Shoreview, MN 55126

$169,900D

2 bd · 1.0 ba · 941 sqft · Built 1984 · Condo · Pending · 159 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,879/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$325
• HOA: −$385
• Vac / Maint / Mgmt: −$395
• Net cashflow: $-117/mo
• Annual: $-1,406/yr
• Cap rate: 5.47%
• Cash-on-cash: -2.96%
• DSCR: 0.87
• 1% rule: 1.11%
• Cash to close: $47,572

Investor read

• This is a 2-bed/1.0-bath condo listed at $170k.
• At list price, monthly cash flow is $-117 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $149k (12.2% below list).
• Meets the 1% rule at list price ($2k rent vs $170k).
• It's been on market 159 days — a 12% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $149k (12.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#89 in MN, #2,019 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+, employment A+; Watch: cost of living C-, amenities F, health & safety F.
• Mounds View Public School District (suburban): math 58% / reading 64% proficiency, ranked #30 of 301 in MN (top 10%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: HOA is 20% of rent.
• Market conditions: Rents rising (+3.7%/yr); 147 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,202 units permitted in Ramsey County in 2024 (880 in 5+ unit buildings).
• Ramsey County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 12 sale attempts since 24y ago; this cycle's ask has dropped $60k (26%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.5% vs local median 3.8% in Shoreview — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 159 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 A-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?