516 3rd St S

Hallock, MN 56728

$134,900D

2 bd · 2.0 ba · 1,304 sqft · Built 1950 · SingleFamily · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $898/mo
• Mortgage (P&I): −$707
• Tax + insurance: −$152
• HOA: −$0
• Vac / Maint / Mgmt: −$189
• Net cashflow: $-150/mo
• Annual: $-1,795/yr
• Cap rate: 4.96%
• Cash-on-cash: -4.75%
• DSCR: 0.79
• 1% rule: 0.67%
• Cash to close: $37,772

Investor read

• This is a 2-bed/2.0-bath single-family listed at $135k.
• At list price, monthly cash flow is $-150 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $108k (19.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $90k (33.4% below list).
• It's been on market 21 days — a 2% lower offer ($133k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $90k (33.4% below list) — sets the bar for 1% rule.
• In year one you build about $8k of equity ($933 loan paydown + $7k appreciation (5.2% local appreciation)).
• Location reads 78/100 on livability (#104 in MN, #2,386 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Kittson Central School District (rural): math 65% / reading 70% proficiency, ranked #60 of 467 in MN (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 4 units permitted in Kittson County in 2024 (0 in 5+ unit buildings).
• Kittson County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• By year 5, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.

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?
• Built in 1950 — 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?
• 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.
• 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.