104 Rossman Ave

Detroit Lakes, MN 56501

$169,000B

2 bd · 1.0 ba · 480 sqft · Built 1942 · SingleFamily · Pending

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,664/mo
• Mortgage (P&I): −$886
• Tax + insurance: −$216
• HOA: −$0
• Vac / Maint / Mgmt: −$559
• Net cashflow: $1,002/mo
• Annual: $12,023/yr
• Cap rate: 13.80%
• Cash-on-cash: 26.82%
• DSCR: 2.19
• 1% rule: 1.58%
• Cash to close: $47,320

Investor read

• This is a 2-bed/1.0-bath single-family listed at $169k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $169k).
• Only 0 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#78 in MN, #1,847 nationally) — a professional / high-income tenant draw. Strengths: housing A+, health & safety A+, cost of living A; Watch: amenities F, commute F.
• Detroit Lakes Public School District (town): math 44% / reading 50% proficiency, ranked #155 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $56/mo; built in 1942 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 301 active listings in the ZIP; 156 units permitted in Becker County in 2024 (0 in 5+ unit buildings).
• Becker County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $97k; list at $169k implies a 74% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $47k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.8% vs local median 5.2% in Detroit Lakes — 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

• Built in 1942 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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 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.