720 Bluff Ave E

Shakopee, MN 55379

$247,500D-

3 bd · 1.0 ba · 1,292 sqft · Built 1900 · SingleFamily · Pending · 220 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,817/mo
• Mortgage (P&I): −$1,298
• Tax + insurance: −$324
• HOA: −$0
• Vac / Maint / Mgmt: −$382
• Net cashflow: $-187/mo
• Annual: $-2,239/yr
• Cap rate: 5.39%
• Cash-on-cash: -3.23%
• DSCR: 0.86
• 1% rule: 0.73%
• Cash to close: $69,300

Investor read

• This is a 3-bed/1.0-bath single-family listed at $248k.
• At list price, monthly cash flow is $-187 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $215k (13.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $182k (26.6% below list).
• It's been on market 220 days — a 12% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $182k (26.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 90/100 on livability (#3 in MN, #102 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+.
• Shakopee Public School District (suburban): math 42% / reading 56% proficiency, ranked #95 of 301 in MN (top 32%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Eagle Creek Elementary School (math 56% / reading 59%, grade C+, #261 of 857 statewide, top 31%, 643 students, 43% FRL); Shakopee East Middle School (math 33% / reading 56%, grade D, #118 of 258 statewide, top 48%, 796 students, 43% FRL); Shakopee High School (math 47% / reading 60%, grade C-, #104 of 471 statewide, top 22%, 2,770 students, 38% FRL) — zoned schools average 41% FRL vs 26% district-wide (15 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 464 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 699 units permitted in Scott County in 2024 (84 in 5+ unit buildings).
• Scott County population projected at +31% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 19y ago; this cycle's ask has dropped $28k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.4% vs local median 3.3% in Shakopee — 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

• 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 220 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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.