120 E Center Ave

McGregor, MN 55760

$109,000C-

2 bd · 2.0 ba · 1,382 sqft · Built 2001 · Other · Pending · 36 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,096/mo
• Mortgage (P&I): −$572
• Tax + insurance: −$291
• HOA: −$0
• Vac / Maint / Mgmt: −$230
• Net cashflow: $4/mo
• Annual: $43/yr
• Cap rate: 6.33%
• Cash-on-cash: 0.14%
• DSCR: 1.01
• 1% rule: 1.01%
• Cash to close: $30,520

Investor read

• This is a 2-bed/2.0-bath other listed at $109k.
• At list price, monthly cash flow is $4 ($43/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $109k).
• It's been on market 36 days — a 3% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (3.0% below list) — sets the bar for market timing.
• In year one you build about $12k of equity ($754 loan paydown + $11k appreciation (10.0% local appreciation)).
• Location reads 67/100 on livability (#429 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools C-, health & safety C-, amenities F.
• Mcgregor Public School District (rural): math 31% / reading 44% proficiency, ranked #243 of 301 in MN (top 81%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 2.7% of price.
• Market conditions: 94 active listings in the ZIP; 134 units permitted in Aitkin County in 2024 (0 in 5+ unit buildings).
• Aitkin County population projected at -25% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$41k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 0.8% in McGregor — 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 36 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.