3241 Cedar Ave S

Minneapolis, MN 55407

$399,900B

5 bd · 3.0 ba · 3,087 sqft · Built 1898 · MultiFamily · Contingent - Inspection · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,531/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$741
• HOA: −$0
• Vac / Maint / Mgmt: −$1,372
• Net cashflow: $2,322/mo
• Annual: $27,859/yr
• Cap rate: 13.26%
• Cash-on-cash: 24.88%
• DSCR: 2.11
• 1% rule: 1.63%
• Cash to close: $111,972

Investor read

• This is a 3 × 5-bed/3.0-bath units multifamily listed at $400k.
• At list price, monthly cash flow is $2k ($28k/yr) — positive. Per door: $774/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $400k).
• It's been on market 19 days — a 2% lower offer ($394k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $394k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Cityview Elementary (math 2% / reading 2%, grade F, #856 of 857 statewide, top 100%, 200 students, 88% FRL); South High (reading 75%, 1,466 students, 66% FRL) — zoned schools average 77% FRL vs 58% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 2% at this address vs 40% district-wide (-38 pts) — the specific schools serving this property underperform the Minneapolis Public School District average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1898 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.3%/yr); 148 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 10 sale attempts since 23y 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.
• At projected returns (-3.0% appreciation + 4.3% rent growth), your $112k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.3% vs local median 3.1% in Minneapolis — 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.
• At $6,531/mo this rent would consume 100% of the median local household income ($78k/yr) (locally 1583% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1898 — 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.
• Crime grade is F 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?
• 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.