517 Pine Cone Dr

Perham, MN 56573

$239,000D

3 bd · 2.0 ba · 6,003 sqft · Built 1998 · SingleFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,300/mo
• Mortgage (P&I): −$1,253
• Tax + insurance: −$266
• HOA: −$300
• Vac / Maint / Mgmt: −$483
• Net cashflow: $-3/mo
• Annual: $-35/yr
• Cap rate: 6.28%
• Cash-on-cash: -0.05%
• DSCR: 1.00
• 1% rule: 0.96%
• Cash to close: $66,920

Investor read

• This is a 3-bed/2.0-bath single-family listed at $239k.
• At list price, monthly cash flow is $-3 ($-35/yr) — negative.
• To cash-flow at today's rent, offer at most $238k (0.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $230k (3.8% below list).
• It's been on market 15 days — a 2% lower offer ($235k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $230k (3.8% 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 $7k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#328 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Perham-Dent Public School District (town): math 45% / reading 57% proficiency, ranked #110 of 301 in MN (top 36%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 92 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 2 sale attempts since 10y 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 $239k implies a 77% gain — meaningful room to come down on a strong offer.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.