1820 1st Ave S #102

Minneapolis, MN 55403

$70,000D

1 bd · 1.0 ba · 531 sqft · Built 1925 · Condo · Pending · 205 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,121/mo
• Mortgage (P&I): −$367
• Tax + insurance: −$138
• HOA: −$578
• Vac / Maint / Mgmt: −$235
• Net cashflow: $-198/mo
• Annual: $-2,373/yr
• Cap rate: 2.90%
• Cash-on-cash: -12.11%
• DSCR: 0.46
• 1% rule: 1.60%
• Cash to close: $19,600

Investor read

• This is a 1-bed/1.0-bath condo listed at $70k.
• At list price, monthly cash flow is $-198 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $35k (49.9% below list).
• Meets the 1% rule at list price ($1k rent vs $70k).
• It's been on market 205 days — a 12% lower offer ($62k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (49.9% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $484 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.
• Watch-outs: HOA is 52% of rent; built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.1%/yr); 117 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 24d 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.
• 8 sale attempts since 18y ago; this cycle's ask has dropped $8k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.

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 205 days. Have you received any prior offers? Is the seller open to a 50% 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?