421 West Ave

Detroit Lakes, MN 56501

$299,900D+

2 bd · 2.0 ba · 2,048 sqft · Built 1967 · SingleFamily · Active · 88 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,598/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$406
• HOA: −$0
• Vac / Maint / Mgmt: −$546
• Net cashflow: $74/mo
• Annual: $887/yr
• Cap rate: 6.59%
• Cash-on-cash: 1.06%
• DSCR: 1.05
• 1% rule: 0.87%
• Cash to close: $83,972

Investor read

• This is a 2-bed/2.0-bath single-family listed at $300k.
• At list price, monthly cash flow is $74 ($887/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 $260k (13.4% below list).
• It's been on market 88 days — a 6% lower offer ($282k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $260k (13.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#78 in MN, #1,847 nationally) — a professional / high-income tenant draw. Strengths: housing A+, health & safety A+, cost of living A; Watch: amenities F, commute F.
• Detroit Lakes Public School District (town): math 44% / reading 50% proficiency, ranked #155 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Rossman Elementary (math 64% / reading 55%, grade B-, #216 of 857 statewide, top 29%, 573 students, 40% FRL); Detroit Lakes Middle (math 29% / reading 42%, grade F, #172 of 258 statewide, top 68%, 596 students, 46% FRL); Detroit Lakes Senior High (math 52% / reading 57%, grade C-, #87 of 471 statewide, top 22%, 865 students, 37% FRL).
• Market conditions: 307 active listings in the ZIP; 156 units permitted in Becker County in 2024 (0 in 5+ unit buildings).
• Becker County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 8y 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 $135k; list at $300k implies a 122% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 5.2% in Detroit Lakes — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

Questions for listing agent

• It's been on market 88 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1967 — 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?
• 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.
• 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.