140 Davis St S

Cambridge, MN 55008

$225,000F

3 bd · 2.0 ba · 974 sqft · Built 1910 · SingleFamily · Pending · 53 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,233/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$250
• HOA: −$0
• Vac / Maint / Mgmt: −$259
• Net cashflow: $-456/mo
• Annual: $-5,468/yr
• Cap rate: 3.86%
• Cash-on-cash: -8.68%
• DSCR: 0.61
• 1% rule: 0.55%
• Cash to close: $63,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-456 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $145k (35.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $123k (45.2% below list).
• It's been on market 53 days — a 3% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $123k (45.2% 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 75/100 on livability (#180 in MN, #3,872 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, crime A; Watch: amenities F, commute F.
• Cambridge-Isanti Public School District (town): math 47% / reading 55% proficiency, ranked #96 of 301 in MN (top 32%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 193 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 191 units permitted in Isanti County in 2024 (28 in 5+ unit buildings).
• Isanti County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 8 sale attempts since 27y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $180k; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 3.9% vs local median 3.0% in Cambridge — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 53 days. Have you received any prior offers? Is the seller open to a 45% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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.
• 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.