11359 5th St NE

Hanover, MN 55341

$449,900D-

5 bd · 3.0 ba · 2,251 sqft · Built 2026 · Other · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,799/mo
• Mortgage (P&I): −$2,359
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$798
• Net cashflow: $-108/mo
• Annual: $-1,295/yr
• Cap rate: 6.01%
• Cash-on-cash: -1.03%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $125,972

Investor read

• This is a 5-bed/3.0-bath other listed at $450k.
• At list price, monthly cash flow is $-108 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $434k (3.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $380k (15.6% below list).
• It's been on market 21 days — a 2% lower offer ($443k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $380k (15.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#293 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living F.
• Buffalo-Hanover-Montrose Public Schools (town): math 52% / reading 56% proficiency, ranked #63 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: Hanover Elementary (math 72% / reading 67%, grade A-, #74 of 857 statewide, top 10%, 369 students, 18% FRL); Buffalo Community Middle (math 48% / reading 53%, grade C, #72 of 258 statewide, top 29%, 1,142 students, 30% FRL); Buffalo Senior High (math 42% / reading 61%, grade D+, #124 of 471 statewide, top 27%, 1,818 students, 24% FRL).
• Market conditions: 102 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1,260 units permitted in Wright County in 2024 (180 in 5+ unit buildings).
• Wright County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts 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.
• Cap rate 6.0% vs local median 4.0% in Hanover — 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

• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.
• 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.