12605 Sherwood Pl

Minnetonka, MN 55305

$249,900C-

2 bd · 2.0 ba · 1,066 sqft · Built 1984 · Condo · Pending · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,563/mo
• Mortgage (P&I): −$1,311
• Tax + insurance: −$322
• HOA: −$506
• Vac / Maint / Mgmt: −$538
• Net cashflow: $-114/mo
• Annual: $-1,367/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.95%
• DSCR: 0.91
• 1% rule: 1.03%
• Cash to close: $69,972

Investor read

• This is a 2-bed/2.0-bath condo listed at $250k.
• At list price, monthly cash flow is $-114 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $230k (8.1% below list).
• Meets the 1% rule at list price ($3k rent vs $250k).
• It's been on market 24 days — a 2% lower offer ($246k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $230k (8.1% below list) — sets the bar for cash-flow.
• 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 (#187 in MN, #3,994 nationally) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A-; Watch: amenities F, cost of living F, health & safety F.
• Wayzata Public School District (urban): math 75% / reading 78% proficiency, ranked #2 of 301 in MN (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical; only 11% free/reduced lunch — higher-income household profile.
• Zoned schools: Sunset Hill Elementary (math 73% / reading 70%, grade A-, #58 of 857 statewide, top 7%, 670 students, 24% FRL); Wayzata East Middle (math 72% / reading 80%, grade A, #1 of 258 statewide, top 0%, 609 students, 15% FRL); Wayzata High (math 77% / reading 84%, grade A, #2 of 471 statewide, top 0%, 3,523 students, 14% FRL).
• Market conditions: Rents rising (+3.3%/yr); 123 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $147k; list at $250k implies a 69% gain — meaningful room to come down on a strong offer.
• Cap rate 5.7% vs local median 2.4% in Minnetonka — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.