17025 Eastwood Ave #35

Lakeville, MN 55024

$274,900D

2 bd · 2.0 ba · 1,518 sqft · Built 2002 · Townhouse · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,638/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$330
• HOA: −$380
• Vac / Maint / Mgmt: −$554
• Net cashflow: $-68/mo
• Annual: $-812/yr
• Cap rate: 6.00%
• Cash-on-cash: -1.05%
• DSCR: 0.95
• 1% rule: 0.96%
• Cash to close: $76,972

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $275k.
• At list price, monthly cash flow is $-68 ($-812/yr) — negative.
• To cash-flow at today's rent, offer at most $263k (4.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $264k (4.0% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $263k (4.3% below list) — sets the bar for cash-flow.
• 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 84/100 on livability (#25 in MN, #711 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: amenities D+, commute F, cost of living F.
• Farmington Public School District (suburban): math 43% / reading 52% proficiency, ranked #104 of 301 in MN (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 12% free/reduced lunch — higher-income household profile.
• Zoned schools: North Trail Elementary (math 57% / reading 57%, grade C+, #265 of 857 statewide, top 35%, 639 students, 34% FRL); Levi P. Dodge Middle School (math 37% / reading 54%, grade D+, #106 of 258 statewide, top 43%, 721 students, 27% FRL); Farmington High School (math 32% / reading 56%, grade F, #210 of 471 statewide, top 44%, 2,201 students, 22% FRL) — zoned schools average 28% FRL vs 12% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 327 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 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.
• 4 sale attempts since 10y 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 $168k; list at $275k implies a 64% gain — meaningful room to come down on a strong offer.
• Cap rate 6.0% vs local median 3.2% in Lakeville — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.