506 3rd Ave NE

Roseau, MN 56751

$505,000B

204 bd · 144.0 ba · 6,120 sqft · Built 1967 · MultiFamily · Active · 311 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,794/mo
• Mortgage (P&I): −$2,648
• Tax + insurance: −$842
• HOA: −$0
• Vac / Maint / Mgmt: −$2,267
• Net cashflow: $5,037/mo
• Annual: $60,448/yr
• Cap rate: 18.26%
• Cash-on-cash: 42.75%
• DSCR: 2.90
• 1% rule: 2.14%
• Cash to close: $141,400

Investor read

• This is a 5×2bd/1ba + 7×1bd/1ba units multifamily listed at $505k. Condition is rated fair.
• At list price, monthly cash flow is $5k ($60k/yr) — positive. Per door: $420/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($11k rent vs $505k).
• It's been on market 311 days — a 12% lower offer ($444k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $444k (12.0% 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 $15k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#80 in MN, #1,901 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D+, commute F.
• Roseau Public School District (town): math 45% / reading 53% proficiency, ranked #125 of 301 in MN (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 17% free/reduced lunch — higher-income household profile.
• Market conditions: 42 active listings in the ZIP; 49 units permitted in Roseau County in 2024 (15 in 5+ unit buildings).
• Roseau County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $141k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 18.3% vs local median 3.5% in Roseau — 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

• It's been on market 311 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1967 — 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?

Repairs flagged (vision-AI assessment)

• Minor: Kitchen cabinets — Aesthetic update needed.
• Minor: Kitchen countertops — Clean and freshen up appearance.
• Minor: Bathroom fixtures — Update to modernize the space.
• Moderate: Roof — Signs of wear, may need replacement or repair.
• Moderate: Exterior paint — Discoloration and wear, may need repainting.
• Moderate: Flooring — Worn carpet, may need replacement or reupholstering.