5817-19 W 8th St

Duluth, MN 55807

$265,000C

4 bd · 2.0 ba · 2,498 sqft · Built 1915 · MultiFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,099/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$524
• HOA: −$0
• Vac / Maint / Mgmt: −$651
• Net cashflow: $534/mo
• Annual: $6,411/yr
• Cap rate: 8.96%
• Cash-on-cash: 9.54%
• DSCR: 1.42
• 1% rule: 1.17%
• Cash to close: $74,200

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $265k.
• At list price, monthly cash flow is $534 ($6k/yr) — positive. Per door: $267/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $265k).
• It's been on market 55 days — a 3% lower offer ($257k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $257k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#36 in MN, #1,060 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Duluth Public School District (urban): math 44% / reading 55% proficiency, ranked #132 of 301 in MN (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Laura Macarthur Elementary (math 22% / reading 27%, grade F, #722 of 857 statewide, top 85%, 320 students, 76% FRL); Lincoln Park Middle School (math 26% / reading 39%, grade F, #186 of 258 statewide, top 72%, 524 students, 66% FRL); Denfeld High School (math 32% / reading 42%, grade F, #282 of 471 statewide, top 63%, 940 students, 56% FRL) — zoned schools average 66% FRL vs 39% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 31% at this address vs 50% district-wide (-18 pts) — the specific schools serving this property underperform the Duluth Public School District average; the district grade overstates school quality for this exact location.
• Watch-outs: flood insurance adds $56/mo; built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 50 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• Current owner paid $130k; list at $265k implies a 104% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.0% vs local median 4.9% in Duluth — 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.
• At $3,099/mo this rent would consume 60% of the median local household income ($62k/yr) (locally 407% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 3% 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?
• Built in 1915 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.