404 NW 1st Ave NW Unit N

Dilworth, MN 56529

$72,500C+

2 bd · 1.0 ba · 852 sqft · Built 1977 · SingleFamily · Pending · 117 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,098/mo
• Mortgage (P&I): −$380
• Tax + insurance: −$115
• HOA: −$195
• Vac / Maint / Mgmt: −$231
• Net cashflow: $177/mo
• Annual: $2,126/yr
• Cap rate: 9.23%
• Cash-on-cash: 10.47%
• DSCR: 1.47
• 1% rule: 1.51%
• Cash to close: $20,300

Investor read

• This is a 2-bed/1.0-bath single-family listed at $72k.
• At list price, monthly cash flow is $177 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $72k).
• It's been on market 117 days — a 9% lower offer ($66k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $66k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $501 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#275 in MN) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, employment A; Watch: crime F, amenities F, commute F.
• Dilworth-Glyndon-Felton (suburban): math 43% / reading 52% proficiency, ranked #144 of 301 in MN (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Dilworth-Glyndon-Felton Elementary (math 57% / reading 47%, grade C-, #368 of 857 statewide, top 47%, 606 students, 39% FRL); Dilworth-Glyndon-Felton Middle Sch (math 36% / reading 55%, grade D+, #106 of 258 statewide, top 43%, 506 students, 32% FRL); Dilworth-Glyndon-Felton Senior High (math 47% / reading 52%, grade D, #143 of 471 statewide, top 33%, 449 students, 27% FRL).
• Market conditions: 33 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 269 units permitted in Clay County in 2024 (153 in 5+ unit buildings).
• Clay County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 3y 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 $52k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 9.2% vs local median 3.5% in Dilworth — 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

• It's been on market 117 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 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?
• 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?
• 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.