213 S 2nd St St W

Aurora, MN 55705

$155,000D-

3 bd · 2.0 ba · 1,390 sqft · Built 1957 · SingleFamily · Pending · 189 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,198/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$206
• HOA: −$0
• Vac / Maint / Mgmt: −$252
• Net cashflow: $-73/mo
• Annual: $-873/yr
• Cap rate: 5.73%
• Cash-on-cash: -2.01%
• DSCR: 0.91
• 1% rule: 0.77%
• Cash to close: $43,400

Investor read

• This is a 3-bed/2.0-bath single-family listed at $155k.
• At list price, monthly cash flow is $-73 ($-873/yr) — negative.
• To cash-flow at today's rent, offer at most $142k (8.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $120k (22.7% below list).
• It's been on market 189 days — a 12% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $120k (22.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#312 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Mesabi East School District (rural): math 27% / reading 47% proficiency, ranked #240 of 301 in MN (top 80%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mesabi East Elementary (math 33% / reading 47%, grade F, #600 of 857 statewide, top 70%, 474 students, 51% FRL); Mesabi East Secondary (math 12% / reading 47%, grade F, #354 of 471 statewide, top 77%, 415 students, 43% FRL).
• Watch-outs: built in 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 25 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• Current owner paid $75k; list at $155k implies a 107% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate 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?
• It's been on market 189 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• Built in 1957 — 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.
• 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.