1931 E Superior St

Duluth, MN 55812

$404,900B-

2 bd · 2.0 ba · 2,190 sqft · Built 1902 · MultiFamily · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,379/mo
• Mortgage (P&I): −$2,123
• Tax + insurance: −$558
• HOA: −$0
• Vac / Maint / Mgmt: −$1,340
• Net cashflow: $2,358/mo
• Annual: $28,294/yr
• Cap rate: 13.28%
• Cash-on-cash: 24.96%
• DSCR: 2.11
• 1% rule: 1.58%
• Cash to close: $113,372

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $405k.
• At list price, monthly cash flow is $2k ($28k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $405k).
• It's been on market 26 days — a 2% lower offer ($399k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $399k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#36 in MN, #1,060 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Duluth Public School District (urban): math 44% / reading 55% proficiency, ranked #132 of 301 in MN (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Congdon Elementary (math 71% / reading 76%, grade A, #41 of 857 statewide, top 5%, 452 students, 20% FRL); Ordean East Middle School (math 45% / reading 61%, grade C+, #53 of 258 statewide, top 22%, 989 students, 26% FRL); East High School (math 42% / reading 73%, grade C, #59 of 471 statewide, top 13%, 1,494 students, 23% FRL) — zoned schools average 23% FRL vs 39% district-wide (16 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: built in 1902 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.1%/yr); 52 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• Current owner paid $105k; list at $405k implies a 286% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $113k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.3% vs local median 4.9% in Duluth — 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.
• At $6,379/mo this rent would consume 117% of the median local household income ($66k/yr) (locally 655% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1902 — 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.