5125 Howe Ln

Brooklyn Center, MN 55429

$305,000D

4 bd · 2.0 ba · 1,724 sqft · Built 1959 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,423/mo
• Mortgage (P&I): −$1,599
• Tax + insurance: −$572
• HOA: −$0
• Vac / Maint / Mgmt: −$509
• Net cashflow: $-258/mo
• Annual: $-3,094/yr
• Cap rate: 5.28%
• Cash-on-cash: -3.62%
• DSCR: 0.84
• 1% rule: 0.79%
• Cash to close: $85,400

Investor read

• This is a 4-bed/2.0-bath single-family listed at $305k.
• At list price, monthly cash flow is $-258 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $259k (14.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $242k (20.6% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $242k (20.6% 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 73/100 on livability (#253 in MN) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, cost of living A-; Watch: schools D+, crime F, amenities F.
• Osseo Public School District (suburban): math 42% / reading 51% proficiency, ranked #129 of 301 in MN (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 87 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 17y 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 $221k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.

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?
• Built in 1959 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• 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.