4617 14th Ave NW

Rochester, MN 55901

$200,000D

2 bd · 2.0 ba · 1,140 sqft · Built 1980 · SingleFamily · Pending · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,388/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$278
• HOA: −$0
• Vac / Maint / Mgmt: −$292
• Net cashflow: $-229/mo
• Annual: $-2,753/yr
• Cap rate: 4.92%
• Cash-on-cash: -4.92%
• DSCR: 0.78
• 1% rule: 0.69%
• Cash to close: $56,000

Investor read

• This is a 2-bed/2.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-229 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $159k (20.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $139k (30.6% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $139k (30.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Gage Elementary (math 24% / reading 32%, grade F, #702 of 857 statewide, top 82%, 581 students, 63% FRL); John Adams Middle (math 20% / reading 42%, grade F, #191 of 258 statewide, top 74%, 731 students, 42% FRL); John Marshall Senior High (math 37% / reading 58%, grade D, #162 of 471 statewide, top 35%, 1,573 students, 43% FRL) — zoned schools average 49% FRL vs 31% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.2%/yr); 507 active listings in the ZIP; 21 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.9% vs local median 3.6% in Rochester — 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.
• This rent is only 18% of the median local income ($95k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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?
• 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?
• 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.