1707 7th St NE

Rochester, MN 55906

$344,000D-

5 bd · 2.5 ba · 1,904 sqft · Built 1957 · SingleFamily · Pending · 45 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,917/mo
• Mortgage (P&I): −$1,804
• Tax + insurance: −$434
• HOA: −$0
• Vac / Maint / Mgmt: −$403
• Net cashflow: $-724/mo
• Annual: $-8,683/yr
• Cap rate: 3.77%
• Cash-on-cash: -9.01%
• DSCR: 0.60
• 1% rule: 0.56%
• Cash to close: $96,320

Investor read

• This is a 5-bed/2.5-bath single-family listed at $344k.
• At list price, monthly cash flow is $-724 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $216k (37.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $192k (44.3% below list).
• It's been on market 45 days — a 3% lower offer ($334k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $192k (44.3% 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 $10k 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.
• Watch-outs: built in 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.2%/yr); 218 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 3 sale attempts since 16y 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 $180k; list at $344k implies a 91% gain — meaningful room to come down on a strong offer.

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?
• It's been on market 45 days. Have you received any prior offers? Is the seller open to a 44% concession, seller financing, or rate buy-down credit?
• Built in 1957 — 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.
• 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.