641 Summit Ave

Balaton, MN 56115

$158,000D

2 bd · 1.0 ba · 1,080 sqft · Built 1968 · SingleFamily · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,067/mo
• Mortgage (P&I): −$829
• Tax + insurance: −$216
• HOA: −$0
• Vac / Maint / Mgmt: −$224
• Net cashflow: $-202/mo
• Annual: $-2,422/yr
• Cap rate: 4.76%
• Cash-on-cash: -5.47%
• DSCR: 0.76
• 1% rule: 0.68%
• Cash to close: $44,240

Investor read

• This is a 2-bed/1.0-bath single-family listed at $158k.
• At list price, monthly cash flow is $-202 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $122k (22.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $107k (32.5% below list).
• It's been on market 33 days — a 3% lower offer ($153k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $107k (32.5% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#477 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, schools F, amenities F.
• Market conditions: 52 active listings in the ZIP; 91 units permitted in Lyon County in 2024 (72 in 5+ unit buildings).
• Lyon County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $60k; list at $158k implies a 163% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$43k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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 33 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• Built in 1968 — 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.