521 E 5th St

Redwood Falls, MN 56283

$209,900F

3 bd · 3.0 ba · 1,002 sqft · Built 1936 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,528/mo
• Mortgage (P&I): −$1,101
• Tax + insurance: −$246
• HOA: −$0
• Vac / Maint / Mgmt: −$321
• Net cashflow: $-140/mo
• Annual: $-1,683/yr
• Cap rate: 5.49%
• Cash-on-cash: -2.86%
• DSCR: 0.87
• 1% rule: 0.73%
• Cash to close: $58,772

Investor read

• This is a 3-bed/3.0-bath single-family listed at $210k.
• At list price, monthly cash flow is $-140 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $185k (11.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $153k (27.2% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $153k (27.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#169 in MN, #3,642 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Redwood Area School District (town): math 39% / reading 46% proficiency, ranked #207 of 301 in MN (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1936 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 47 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 25 units permitted in Redwood County in 2024 (0 in 5+ unit buildings).
• Redwood County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 10y ago; this cycle's ask is 31% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $155k; 36% 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 1936 — 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.
• 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.