1118 E 6th St

Duluth, MN 55805

$235,000D

3 bd · 1.0 ba · 1,408 sqft · Built 1914 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,916/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$298
• HOA: −$0
• Vac / Maint / Mgmt: −$402
• Net cashflow: $-17/mo
• Annual: $-202/yr
• Cap rate: 6.21%
• Cash-on-cash: -0.31%
• DSCR: 0.99
• 1% rule: 0.82%
• Cash to close: $65,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $235k.
• At list price, monthly cash flow is $-17 ($-202/yr) — negative.
• To cash-flow at today's rent, offer at most $232k (1.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $192k (18.5% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $192k (18.5% 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 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: Myers-Wilkins Elementary (math 17% / reading 37%, grade F, #703 of 857 statewide, top 84%, 341 students, 88% FRL); Ordean East Middle School (math 45% / reading 61%, grade C+, #53 of 258 statewide, top 22%, 989 students, 26% FRL); East High School (math 42% / reading 73%, grade C, #59 of 471 statewide, top 13%, 1,494 students, 23% FRL).
• Watch-outs: built in 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.3%/yr); 41 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 43% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• Cap rate 6.2% vs local median 4.9% in Duluth — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $1,916/mo this rent would consume 53% of the median local household income ($43k/yr) (locally 927% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• Built in 1914 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.