5023 Edgewater Dr

Mound, MN 55364

$389,000C+

4 bd · 2.0 ba · 1,821 sqft · Built 1935 · SingleFamily · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,766/mo
• Mortgage (P&I): −$2,040
• Tax + insurance: −$461
• HOA: −$0
• Vac / Maint / Mgmt: −$791
• Net cashflow: $474/mo
• Annual: $5,689/yr
• Cap rate: 7.76%
• Cash-on-cash: 5.22%
• DSCR: 1.23
• 1% rule: 0.97%
• Cash to close: $108,920

Investor read

• This is a 4-bed/2.0-bath single-family listed at $389k.
• At list price, monthly cash flow is $474 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $377k (3.2% below list).
• It's been on market 33 days — a 3% lower offer ($377k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $377k (3.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#20 in MN, #559 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, commute A+; Watch: amenities F.
• Westonka Public School District (rural): math 65% / reading 68% proficiency, ranked #14 of 301 in MN (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 147 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 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.
• 5 sale attempts since 17y 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 7.8% vs local median 1.8% in Mound — 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 42% of the median local income ($109k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 33 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1935 — 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?
• 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.