211 13th St

Heron Lake, MN 56137

$229,000F

3 bd · 2.0 ba · 3,415 sqft · Built 1976 · SingleFamily · Active · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,325/mo
• Mortgage (P&I): −$1,201
• Tax + insurance: −$264
• HOA: −$0
• Vac / Maint / Mgmt: −$278
• Net cashflow: $-418/mo
• Annual: $-5,019/yr
• Cap rate: 4.10%
• Cash-on-cash: -7.83%
• DSCR: 0.65
• 1% rule: 0.58%
• Cash to close: $64,120

Investor read

• This is a 3-bed/2.0-bath single-family listed at $229k.
• At list price, monthly cash flow is $-418 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $155k (32.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $132k (42.1% below list).
• It's been on market 46 days — a 3% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $132k (42.1% below list) — sets the bar for 1% rule.
• In year one you build about $8k of equity ($2k loan paydown + $7k appreciation (3.0% local appreciation)).
• Location reads 78/100 on livability (#106 in MN, #2,450 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Heron Lake-Okabena School District (rural): math 35% / reading 45% proficiency, ranked #354 of 467 in MN (top 76%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 8 active listings in the ZIP; 4 units permitted in Jackson County in 2024 (0 in 5+ unit buildings).
• Jackson County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• By year 5, paydown + projected appreciation supports a ~$37k 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?
• It's been on market 46 days. Have you received any prior offers? Is the seller open to a 42% concession, seller financing, or rate buy-down credit?
• Built in 1976 — 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.
• 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.