10279 Upper 196th Way W

Lakeville, MN 55044

$399,900D+

5 bd · 2.0 ba · 2,676 sqft · Built 1960 · SingleFamily · Pending · 252 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,176/mo
• Mortgage (P&I): −$2,097
• Tax + insurance: −$553
• HOA: −$0
• Vac / Maint / Mgmt: −$667
• Net cashflow: $-141/mo
• Annual: $-1,696/yr
• Cap rate: 5.87%
• Cash-on-cash: -1.51%
• DSCR: 0.93
• 1% rule: 0.79%
• Cash to close: $111,972

Investor read

• This is a 5-bed/2.0-bath single-family listed at $400k.
• At list price, monthly cash flow is $-141 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $375k (6.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $318k (20.6% below list).
• It's been on market 252 days — a 12% lower offer ($352k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $318k (20.6% below list) — sets the bar for 1% rule.
• 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 84/100 on livability (#25 in MN, #711 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, employment A+; Watch: amenities D+, commute F, cost of living F.
• Lakeville Public School District (suburban): math 57% / reading 65% proficiency, ranked #21 of 301 in MN (top 7%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.4%/yr); 713 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $39k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.9% vs local median 3.2% in Lakeville — 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?
• It's been on market 252 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• Built in 1960 — 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.
• 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?
• 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.