12239 4th St

Northome, MN 56661

$135,500D

3 bd · 3.0 ba · 1,404 sqft · Built 1995 · SingleFamily · Active · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $985/mo
• Mortgage (P&I): −$711
• Tax + insurance: −$124
• HOA: −$0
• Vac / Maint / Mgmt: −$207
• Net cashflow: $-56/mo
• Annual: $-671/yr
• Cap rate: 5.80%
• Cash-on-cash: -1.77%
• DSCR: 0.92
• 1% rule: 0.73%
• Cash to close: $37,940

Investor read

• This is a 3-bed/3.0-bath single-family listed at $136k.
• At list price, monthly cash flow is $-56 ($-671/yr) — negative.
• To cash-flow at today's rent, offer at most $126k (7.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $99k (27.3% below list).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $99k (27.3% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($937 loan paydown + $4k appreciation (3.0% local appreciation)).
• Location reads 66/100 on livability (#494 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime C-, health & safety C-, amenities F.
• South Koochiching School District (rural): math 45% / reading 45% proficiency, ranked #333 of 467 in MN (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Northome Elementary (math 44% / reading 54%, grade D, #423 of 857 statewide, top 55%, 84 students, 63% FRL); Northome Secondary (math 15% / reading 44%, grade F, #349 of 471 statewide, top 75%, 84 students, 57% FRL) — zoned schools average 60% FRL vs 45% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 16 active listings in the ZIP; 26 units permitted in Koochiching County in 2024 (0 in 5+ unit buildings).
• Koochiching County population projected at -27% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $38k cash investment doubles in ~7 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.