315 2nd St SE

Harmony, MN 55939

$40,000B+

3 bd · None ba · 1,280 sqft · Built 1920 · SingleFamily · Active · 67 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,172/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$53
• HOA: −$0
• Vac / Maint / Mgmt: −$246
• Net cashflow: $663/mo
• Annual: $7,958/yr
• Cap rate: 26.19%
• Cash-on-cash: 71.05%
• DSCR: 4.16
• 1% rule: 2.93%
• Cash to close: $11,200

Investor read

• This is a 3-bed/?-bath single-family listed at $40k.
• At list price, monthly cash flow is $663 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 67 days — a 6% lower offer ($38k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $38k (6.0% below list) — sets the bar for market timing.
• In year one you build about $4k of equity ($277 loan paydown + $4k appreciation (10.0% local appreciation)).
• Location reads 77/100 on livability (#122 in MN, #2,818 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Fillmore Central (rural): math 33% / reading 47% proficiency, ranked #223 of 301 in MN (top 74%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 6 active listings in the ZIP; 65 units permitted in Fillmore County in 2024 (0 in 5+ unit buildings).
• Fillmore County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~1 year — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 67 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1920 — 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.
• 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.