655 4th Ave

Mountain Lake, MN 56159

$112,500D

2 bd · 1.0 ba · 899 sqft · Built 1950 · SingleFamily · Active · 149 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $855/mo
• Mortgage (P&I): −$590
• Tax + insurance: −$157
• HOA: −$0
• Vac / Maint / Mgmt: −$180
• Net cashflow: $-71/mo
• Annual: $-855/yr
• Cap rate: 5.53%
• Cash-on-cash: -2.71%
• DSCR: 0.88
• 1% rule: 0.76%
• Cash to close: $31,500

Investor read

• This is a 2-bed/1.0-bath single-family listed at $112k.
• At list price, monthly cash flow is $-71 ($-855/yr) — negative.
• To cash-flow at today's rent, offer at most $100k (11.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (24.0% below list).
• It's been on market 149 days — a 12% lower offer ($99k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $86k (24.0% below list) — sets the bar for 1% rule.
• In year one you build about $932 of equity ($778 loan paydown + $154 appreciation (0.1% local appreciation)).
• Location reads 74/100 on livability (#226 in MN, #4,819 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Mountain Lake Public Schools (rural): math 46% / reading 46% proficiency, ranked #172 of 301 in MN (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 19 active listings in the ZIP; 29 units permitted in Cottonwood County in 2024 (15 in 5+ unit buildings).
• Cottonwood County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $55k; list at $112k implies a 105% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 149 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• Built in 1950 — 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?
• 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.