714 S Oak St

Fergus Falls, MN 56537

$54,500B

3 bd · 1.0 ba · 1,264 sqft · Built 1897 · SingleFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,075/mo
• Mortgage (P&I): −$286
• Tax + insurance: −$137
• HOA: −$0
• Vac / Maint / Mgmt: −$226
• Net cashflow: $426/mo
• Annual: $5,113/yr
• Cap rate: 15.68%
• Cash-on-cash: 33.51%
• DSCR: 2.49
• 1% rule: 1.97%
• Cash to close: $15,260

Investor read

• This is a 3-bed/1.0-bath single-family listed at $54k.
• At list price, monthly cash flow is $426 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $54k).
• 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 $377 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#31 in MN, #969 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+; Watch: employment D+, commute F.
• Fergus Falls Public School District (town): math 59% / reading 61% proficiency, ranked #46 of 301 in MN (top 15%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 2.5% of price; built in 1897 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 118 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 7 sale attempts since 17y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~4 years — after that, you're playing with house money.
• Cap rate 15.7% vs local median 3.3% in Fergus Falls — 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 1897 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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?
• 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.