7920 Terrace Rd NE

Spring Lake Park, MN 55432

$350,000D

4 bd · 2.0 ba · 1,536 sqft · Built 1958 · MultiFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,873/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$528
• HOA: −$0
• Vac / Maint / Mgmt: −$603
• Net cashflow: $-94/mo
• Annual: $-1,126/yr
• Cap rate: 5.97%
• Cash-on-cash: -1.15%
• DSCR: 0.95
• 1% rule: 0.82%
• Cash to close: $98,000

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $350k.
• At list price, monthly cash flow is $-94 ($-1k/yr) — negative. Per door: $-47/mo.
• To cash-flow at today's rent, offer at most $333k (4.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $287k (17.9% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $287k (17.9% 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 $10k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#43 in MN, #1,216 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: amenities F.
• Spring Lake Park Public Schools (suburban): math 41% / reading 49% proficiency, ranked #162 of 301 in MN (top 54%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Park Terrace Elementary (math 37% / reading 27%, grade F, #670 of 857 statewide, top 79%, 552 students, 76% FRL); Westwood Intermediate & Middle Sch (math 34% / reading 54%, grade D, #126 of 258 statewide, top 49%, 1,691 students, 49% FRL); Spring Lake Park Senior High (math 47% / reading 32%, grade F, #246 of 471 statewide, top 59%, 1,947 students, 46% FRL) — zoned schools average 57% FRL vs 30% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.8%/yr); 98 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,083 units permitted in Anoka County in 2024 (134 in 5+ unit buildings).
• Anoka County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 13y 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 $252k; 39% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• This rent runs 43% of the median local income ($80k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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 1958 — 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.
• 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.