The Fender Plan

Lakeville, MN 55044

$371,990F

3 bd · 2.5 ba · 1,707 sqft · Built — · SingleFamily · Active · 180 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,745/mo
• Mortgage (P&I): −$2,263
• Tax + insurance: −$719
• HOA: −$0
• Vac / Maint / Mgmt: −$576
• Net cashflow: $-814/mo
• Annual: $-9,764/yr
• Cap rate: 4.03%
• Cash-on-cash: -8.08%
• DSCR: 0.64
• 1% rule: 0.64%
• Cash to close: $120,827

Investor read

• This is a 3-bed/2.5-bath single-family listed at $372k.
• At list price, monthly cash flow is $-814 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $314k (15.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $274k (26.2% below list).
• It's been on market 180 days — a 12% lower offer ($327k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $274k (26.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#25 in MN, #711 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, employment A+; Watch: amenities D+, commute F, cost of living F.
• Farmington Public School District (suburban): math 43% / reading 52% proficiency, ranked #104 of 301 in MN (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 12% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.4%/yr); 718 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Cap rate 4.0% vs local median 3.2% in Lakeville — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 180 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• 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 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.