212 E 5th St

Albert Lea, MN 56007

$124,800D

2 bd · 1.5 ba · 2,514 sqft · Built 1925 · SingleFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,141/mo
• Mortgage (P&I): −$654
• Tax + insurance: −$192
• HOA: −$0
• Vac / Maint / Mgmt: −$240
• Net cashflow: $55/mo
• Annual: $664/yr
• Cap rate: 6.82%
• Cash-on-cash: 1.90%
• DSCR: 1.08
• 1% rule: 0.91%
• Cash to close: $34,944

Investor read

• This is a 2-bed/1.5-bath single-family listed at $125k.
• At list price, monthly cash flow is $55 ($664/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 $114k (8.6% below list).
• It's been on market 17 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (8.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $863 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#274 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, employment D+, amenities F.
• Albert Lea Public School District (town): math 30% / reading 40% proficiency, ranked #258 of 301 in MN (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 150 active listings in the ZIP; 16 units permitted in Freeborn County in 2024 (0 in 5+ unit buildings).
• Freeborn County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Cap rate 6.8% vs local median 4.0% in Albert Lea — 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

• Built in 1925 — 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.