645 N 1st St #300

Minneapolis, MN 55401

$295,000D

2 bd · 1.0 ba · 839 sqft · Built 2000 · Condo · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,901/mo
• Mortgage (P&I): −$1,547
• Tax + insurance: −$433
• HOA: −$653
• Vac / Maint / Mgmt: −$609
• Net cashflow: $-341/mo
• Annual: $-4,088/yr
• Cap rate: 4.91%
• Cash-on-cash: -4.95%
• DSCR: 0.78
• 1% rule: 0.98%
• Cash to close: $82,600

Investor read

• This is a 2-bed/1.0-bath condo listed at $295k.
• At list price, monthly cash flow is $-341 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $235k (20.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $290k (1.7% below list).
• It's been on market 15 days — a 2% lower offer ($291k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $235k (20.4% below list) — sets the bar for cash-flow.
• In year one you build about $806 of equity ($2k loan paydown + $-1k appreciation (-0.4% local appreciation)).
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 23% of rent.
• Market conditions: Rents rising fast (+5.5%/yr); 160 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 7y 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.
• Cap rate 4.9% vs local median 3.1% in Minneapolis — 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 ($114k/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?
• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.