109 S Central Ave

Dalton, MN 56324

$84,900C

1 bd · 1.0 ba · 504 sqft · Built 1945 · SingleFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $774/mo
• Mortgage (P&I): −$445
• Tax + insurance: −$88
• HOA: −$0
• Vac / Maint / Mgmt: −$163
• Net cashflow: $79/mo
• Annual: $944/yr
• Cap rate: 7.41%
• Cash-on-cash: 3.97%
• DSCR: 1.18
• 1% rule: 0.91%
• Cash to close: $23,772

Investor read

• This is a 1-bed/1.0-bath single-family listed at $85k.
• At list price, monthly cash flow is $79 ($944/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 $77k (8.8% below list).
• It's been on market 23 days — a 2% lower offer ($84k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $77k (8.8% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($587 loan paydown + $5k appreciation (5.7% local appreciation)).
• Location reads 63/100 on livability (#668 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime D+, health & safety D+, employment D.
• Fergus Falls Public School District (town): math 59% / reading 61% proficiency, ranked #46 of 301 in MN (top 15%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Cleveland Elementary (math 71% / reading 60%, grade B+, #123 of 857 statewide, top 15%, 369 students, 47% FRL); Kennedy Middle School (math 57% / reading 63%, grade B, #25 of 258 statewide, top 9%, 769 students, 43% FRL); Kennedy High School (math 52% / reading 62%, grade C, #64 of 471 statewide, top 16%, 685 students, 33% FRL) — zoned schools average 41% FRL vs 24% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 12 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• Current owner paid $16k; list at $85k implies a 448% gain — meaningful room to come down on a strong offer.
• At projected returns (5.7% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1945 — 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 F-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 D 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?
• 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.