704 16th Ave N

South St. Paul, MN 55075

$280,000D

3 bd · 2.0 ba · 1,764 sqft · Built 1968 · SingleFamily · Pending · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,260/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$406
• HOA: −$0
• Vac / Maint / Mgmt: −$475
• Net cashflow: $-89/mo
• Annual: $-1,065/yr
• Cap rate: 5.91%
• Cash-on-cash: -1.36%
• DSCR: 0.94
• 1% rule: 0.81%
• Cash to close: $78,400

Investor read

• This is a 3-bed/2.0-bath single-family listed at $280k.
• At list price, monthly cash flow is $-89 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $264k (5.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $226k (19.3% below list).
• It's been on market 16 days — a 2% lower offer ($276k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $226k (19.3% below list) — sets the bar for 1% rule.
• 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: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• South St. Paul Public School District (suburban): math 23% / reading 34% proficiency, ranked #266 of 301 in MN (top 88%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Lincoln Center Elementary (math 33% / reading 41%, grade F, #636 of 857 statewide, top 76%, 666 students, 58% FRL); South St. Paul Middle School (math 12% / reading 30%, grade F, #231 of 258 statewide, top 89%, 658 students, 61% FRL) — zoned schools average 59% FRL vs 36% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 91 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 12y 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 $156k; list at $280k implies a 79% gain — meaningful room to come down on a strong offer.
• Cap rate 5.9% vs local median 4.2% in South St. Paul — 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 runs 31% of the median local income ($88k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1968 — 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.
• 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.