500 Main Ave

Lafayette, MN 56054

$159,000C-

3 bd · 1.5 ba · 2,326 sqft · Built 1900 · SingleFamily · Active · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,333/mo
• Mortgage (P&I): −$834
• Tax + insurance: −$261
• HOA: −$0
• Vac / Maint / Mgmt: −$280
• Net cashflow: $-41/mo
• Annual: $-498/yr
• Cap rate: 5.98%
• Cash-on-cash: -1.12%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $44,520

Investor read

• This is a 3-bed/1.5-bath single-family listed at $159k.
• At list price, monthly cash flow is $-41 ($-498/yr) — negative.
• To cash-flow at today's rent, offer at most $152k (4.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $133k (16.1% below list).
• It's been on market 68 days — a 6% lower offer ($149k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $133k (16.1% below list) — sets the bar for 1% rule.
• In year one you build about $9k of equity ($1k loan paydown + $7k appreciation (4.7% local appreciation)).
• Location reads 64/100 on livability (#570 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, housing A+; Watch: crime C-, amenities F, commute F.
• New Ulm Public School District (town): math 51% / reading 51% proficiency, ranked #104 of 301 in MN (top 35%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 6 active listings in the ZIP; 109 units permitted in Nicollet County in 2024 (47 in 5+ unit buildings).
• 5 sale attempts; this cycle's ask has dropped $10k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $90k; list at $159k implies a 77% gain — meaningful room to come down on a strong offer.
• At projected returns (4.7% appreciation + 3.0% rent growth), your $45k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• It's been on market 68 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.