1000 9th Street South #117

St. James, MN 56081

$77,500D

2 bd · 1.0 ba · 1,066 sqft · Built 1996 · Condo · Active · 81 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $825/mo
• Mortgage (P&I): −$406
• Tax + insurance: −$129
• HOA: −$620
• Vac / Maint / Mgmt: −$173
• Net cashflow: $-504/mo
• Annual: $-6,046/yr
• Cap rate: -1.51%
• Cash-on-cash: -27.86%
• DSCR: -0.24
• 1% rule: 1.06%
• Cash to close: $21,700

Investor read

• This is a 2-bed/1.0-bath condo listed at $78k.
• At list price, monthly cash flow is $-504 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $5k (94.1% below list).
• Meets the 1% rule at list price ($825 rent vs $78k).
• It's been on market 81 days — a 6% lower offer ($73k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $5k (94.1% below list) — sets the bar for cash-flow.
• In year one you build about $8k of equity ($536 loan paydown + $7k appreciation (9.0% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• St. James Public School District (town): math 36% / reading 43% proficiency, ranked #226 of 301 in MN (top 75%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: St. James Northside Elementary (math 45% / reading 42%, grade F, #569 of 857 statewide, top 67%, 480 students, 66% FRL); St. James Middle/High School (math 29% / reading 43%, grade F, #300 of 471 statewide, top 64%, 551 students, 60% FRL) — zoned schools average 63% FRL vs 43% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: HOA is 75% of rent.
• Market conditions: 32 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 4 units permitted in Watonwan County in 2024 (0 in 5+ unit buildings).
• Watonwan County population projected to shrink 10% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 9y 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.
• By year 5, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate -1.5% vs local median 3.5% in St. James — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 81 days. Have you received any prior offers? Is the seller open to a 94% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• 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.