700 Sinclair Lewis Ave

Sauk Centre, MN 56378

$130,000B-

4 bd · 2.0 ba · 1,436 sqft · Built 1885 · SingleFamily · Pending · 165 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,686/mo
• Mortgage (P&I): −$682
• Tax + insurance: −$242
• HOA: −$0
• Vac / Maint / Mgmt: −$354
• Net cashflow: $408/mo
• Annual: $4,898/yr
• Cap rate: 10.06%
• Cash-on-cash: 13.45%
• DSCR: 1.60
• 1% rule: 1.30%
• Cash to close: $36,400

Investor read

• This is a 4-bed/2.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $408 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $130k).
• It's been on market 165 days — a 12% lower offer ($114k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $899 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#127 in MN, #2,899 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Sauk Centre Public School District (town): math 42% / reading 51% proficiency, ranked #164 of 301 in MN (top 54%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Sauk Centre Elementary (math 37% / reading 42%, grade F, #604 of 857 statewide, top 74%, 390 students, 50% FRL); Sauk Centre Middle (math 27% / reading 47%, grade F, #163 of 258 statewide, top 65%, 141 students, 52% FRL); Sauk Centre Secondary (math 52% / reading 58%, grade C, #83 of 471 statewide, top 18%, 608 students, 38% FRL) — zoned schools average 47% FRL vs 29% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1885 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 58 active listings in the ZIP; 661 units permitted in Stearns County in 2024 (291 in 5+ unit buildings).
• Stearns County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 27y ago; this cycle's ask has dropped $60k (32%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $38k; list at $130k implies a 242% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $36k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 10.1% vs local median 3.7% in Sauk Centre — 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.

Questions for listing agent

• It's been on market 165 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1885 — 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.
• Schools are B-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.