1820 1st Ave S #208

Minneapolis, MN 55403

$65,000D

1 bd · 1.0 ba · 531 sqft · Built 1925 · Condo · Active · 375 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,116/mo
• Mortgage (P&I): −$341
• Tax + insurance: −$96
• HOA: −$578
• Vac / Maint / Mgmt: −$234
• Net cashflow: $-133/mo
• Annual: $-1,593/yr
• Cap rate: 3.84%
• Cash-on-cash: -8.75%
• DSCR: 0.61
• 1% rule: 1.72%
• Cash to close: $18,200

Investor read

• This is a 1-bed/1.0-bath condo listed at $65k.
• At list price, monthly cash flow is $-133 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $42k (36.1% below list).
• Meets the 1% rule at list price ($1k rent vs $65k).
• It's been on market 375 days — a 12% lower offer ($57k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $42k (36.1% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $449 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• 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.
• Zoned schools: Ella Baker Elementary (math 2% / reading 17%, grade F, #829 of 857 statewide, top 98%, 602 students, 90% FRL); Anwatin Middle (math 12% / reading 27%, grade F, #234 of 258 statewide, top 92%, 320 students, 81% FRL); Southwest High (math 47% / reading 67%, grade C, #64 of 471 statewide, top 16%, 1,484 students, 29% FRL).
• Watch-outs: HOA is 52% of rent; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.1%/yr); 119 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 9 sale attempts since 18y ago; this cycle's ask has dropped $22k (25%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 3.8% vs local median 3.1% in Minneapolis — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 375 days. Have you received any prior offers? Is the seller open to a 36% concession, seller financing, or rate buy-down credit?
• Built in 1925 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?