3285 Vermilion Trl

Makinen, MN 55763

$37,900B+

3 bd · 1.0 ba · 2,788 sqft · Built 1930 · Other · Pending · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,330/mo
• Mortgage (P&I): −$199
• Tax + insurance: −$116
• HOA: −$0
• Vac / Maint / Mgmt: −$279
• Net cashflow: $736/mo
• Annual: $8,832/yr
• Cap rate: 29.60%
• Cash-on-cash: 83.23%
• DSCR: 4.70
• 1% rule: 3.51%
• Cash to close: $10,612

Investor read

• This is a 3-bed/1.0-bath other listed at $38k.
• At list price, monthly cash flow is $736 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $38k).
• It's been on market 34 days — a 3% lower offer ($37k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $37k (3.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($262 loan paydown + $2k appreciation (5.9% local appreciation)).
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Mesabi East School District (rural): math 27% / reading 47% proficiency, ranked #240 of 301 in MN (top 80%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 3.2% of price; built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 14 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 3 sale attempts; this cycle's ask has dropped $2k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $28k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (5.9% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 34 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1930 — 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.
• 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.