803 E Grove St

Caledonia, MN 55921

$50,000B

3 bd · 1.5 ba · 1,648 sqft · Built 1910 · SingleFamily · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,026/mo
• Mortgage (P&I): −$262
• Tax + insurance: −$177
• HOA: −$0
• Vac / Maint / Mgmt: −$215
• Net cashflow: $371/mo
• Annual: $4,452/yr
• Cap rate: 15.20%
• Cash-on-cash: 31.80%
• DSCR: 2.41
• 1% rule: 2.05%
• Cash to close: $14,000

Investor read

• This is a 3-bed/1.5-bath single-family listed at $50k.
• At list price, monthly cash flow is $371 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $50k).
• It's been on market 22 days — a 2% lower offer ($49k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $49k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $346 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#45 in MN, #1,226 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F.
• Caledonia Public School District (rural): math 49% / reading 61% proficiency, ranked #69 of 301 in MN (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 3.8% of price; built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 23 active listings in the ZIP; 48 units permitted in Houston County in 2024 (0 in 5+ unit buildings).
• Houston County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $30k; list at $50k implies a 64% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $14k cash investment doubles in ~4 years — after that, you're playing with house money.

Questions for listing agent

• Built in 1910 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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.