118 1st St SW

Faribault, MN 55021

$191,900C+

4 bd · 2.5 ba · 1,681 sqft · Built 1920 · SingleFamily · Active · 99 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,026/mo
• Mortgage (P&I): −$1,006
• Tax + insurance: −$221
• HOA: −$0
• Vac / Maint / Mgmt: −$426
• Net cashflow: $373/mo
• Annual: $4,475/yr
• Cap rate: 8.62%
• Cash-on-cash: 8.33%
• DSCR: 1.37
• 1% rule: 1.06%
• Cash to close: $53,732

Investor read

• This is a 4-bed/2.5-bath single-family listed at $192k.
• At list price, monthly cash flow is $373 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $192k).
• It's been on market 99 days — a 9% lower offer ($175k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#158 in MN, #3,440 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, employment C-, commute F.
• Faribault Public School District (town): math 17% / reading 34% proficiency, ranked #275 of 301 in MN (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 165 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 93 units permitted in Rice County in 2024 (0 in 5+ unit buildings).
• 6 sale attempts since 20y ago; this cycle's ask has dropped $18k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 8.6% vs local median 4.1% in Faribault — 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 35% of the median local income ($69k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 99 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.