111 6th St NW

Rochester, MN 55901

$221,500B-

4 bd · 3.0 ba · 780 sqft · Built 1888 · SingleFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,931/mo
• Mortgage (P&I): −$1,162
• Tax + insurance: −$287
• HOA: −$0
• Vac / Maint / Mgmt: −$615
• Net cashflow: $867/mo
• Annual: $10,404/yr
• Cap rate: 10.99%
• Cash-on-cash: 16.78%
• DSCR: 1.75
• 1% rule: 1.32%
• Cash to close: $62,020

Investor read

• This is a 4-bed/3.0-bath single-family listed at $222k.
• At list price, monthly cash flow is $867 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $222k).
• It's been on market 22 days — a 2% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $218k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: John Marshall Senior High (math 37% / reading 58%, grade D, #162 of 471 statewide, top 35%, 1,573 students, 43% FRL).
• Watch-outs: built in 1888 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.2%/yr); 509 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 18y ago; this cycle's ask has dropped $14k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $121k; list at $222k implies a 83% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 2.2% rent growth), your $62k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 11.0% vs local median 3.5% in Rochester — 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.
• This rent runs 37% of the median local income ($95k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1888 — 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?
• 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.