335 Adams St SE

Hutchinson, MN 55350

$145,000C

4 bd · 1.0 ba · 1,038 sqft · Built 1910 · SingleFamily · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,545/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$224
• HOA: −$0
• Vac / Maint / Mgmt: −$324
• Net cashflow: $236/mo
• Annual: $2,833/yr
• Cap rate: 8.25%
• Cash-on-cash: 6.98%
• DSCR: 1.31
• 1% rule: 1.07%
• Cash to close: $40,600

Investor read

• This is a 4-bed/1.0-bath single-family listed at $145k.
• At list price, monthly cash flow is $236 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $145k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#72 in MN, #1,744 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Hutchinson Public School District (town): math 56% / reading 56% proficiency, ranked #62 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 115 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 57 units permitted in McLeod County in 2024 (0 in 5+ unit buildings).
• McLeod County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Cap rate 8.2% vs local median 3.0% in Hutchinson — 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 1910 — 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 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.