228 Elmwood Rd

Hoyt Lakes, MN 55750

$147,500D-

3 bd · 1.0 ba · 864 sqft · Built 1956 · SingleFamily · Active · 47 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,165/mo
• Mortgage (P&I): −$774
• Tax + insurance: −$134
• HOA: −$0
• Vac / Maint / Mgmt: −$245
• Net cashflow: $12/mo
• Annual: $149/yr
• Cap rate: 6.39%
• Cash-on-cash: 0.36%
• DSCR: 1.02
• 1% rule: 0.79%
• Cash to close: $41,300

Investor read

• This is a 3-bed/1.0-bath single-family listed at $148k.
• At list price, monthly cash flow is $12 ($149/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 $117k (21.0% below list).
• It's been on market 47 days — a 3% lower offer ($143k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $117k (21.0% 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 $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#270 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: employment C-, amenities F, commute F.
• Mesabi East School District (rural): math 27% / reading 47% proficiency, ranked #240 of 301 in MN (top 80%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mesabi East Elementary (math 33% / reading 47%, grade F, #600 of 857 statewide, top 70%, 474 students, 51% FRL); Mesabi East Secondary (math 12% / reading 47%, grade F, #354 of 471 statewide, top 77%, 415 students, 43% FRL).
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 23 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 4 sale attempts since 12y 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 $74k; list at $148k implies a 98% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• It's been on market 47 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• Built in 1956 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.