309 5th Ave NW

New Prague, MN 56071

$649,900B

8 bd · 4.0 ba · 3,876 sqft · Built 1976 · MultiFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,200/mo
• Mortgage (P&I): −$3,408
• Tax + insurance: −$736
• HOA: −$0
• Vac / Maint / Mgmt: −$1,932
• Net cashflow: $3,124/mo
• Annual: $37,489/yr
• Cap rate: 12.06%
• Cash-on-cash: 20.60%
• DSCR: 1.92
• 1% rule: 1.42%
• Cash to close: $181,972

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $650k.
• At list price, monthly cash flow is $3k ($37k/yr) — positive. Per door: $781/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $650k).
• It's been on market 17 days — a 2% lower offer ($640k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $640k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#86 in MN, #1,971 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, employment A+; Watch: amenities F, commute F.
• New Prague Area Schools (town): math 57% / reading 60% proficiency, ranked #36 of 301 in MN (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Market conditions: 96 active listings in the ZIP; 699 units permitted in Scott County in 2024 (84 in 5+ unit buildings).
• Scott County population projected at +31% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 29y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $525k; 24% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $182k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 12.1% vs local median 3.1% in New Prague — 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

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1976 — 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 A-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.