820 Mississippi Ave NW

Bemidji, MN 56601

$194,850D

3 bd · 1.0 ba · 864 sqft · Built 1910 · Other · Active · 218 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,598/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$217
• HOA: −$0
• Vac / Maint / Mgmt: −$336
• Net cashflow: $24/mo
• Annual: $285/yr
• Cap rate: 6.44%
• Cash-on-cash: 0.52%
• DSCR: 1.02
• 1% rule: 0.82%
• Cash to close: $54,558

Investor read

• This is a 3-bed/1.0-bath other listed at $195k.
• At list price, monthly cash flow is $24 ($285/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $160k (18.0% below list).
• It's been on market 218 days — a 12% lower offer ($171k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $160k (18.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#252 in MN) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, health & safety A+; Watch: crime F, commute F, employment F.
• Bemidji Public School District (rural): math 42% / reading 50% proficiency, ranked #173 of 301 in MN (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 345 active listings in the ZIP; 165 units permitted in Beltrami County in 2024 (81 in 5+ unit buildings).
• 2 sale attempts since 2y 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 $97k; list at $195k implies a 101% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.6% in Bemidji — 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.

Questions for listing agent

• It's been on market 218 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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.
• Schools are B-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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.