6423 Colony Way Unit 2G

Edina, MN 55435

$125,000D

1 bd · 1.0 ba · 706 sqft · Built 1964 · Condo · Active · 204 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,476/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$194
• HOA: −$518
• Vac / Maint / Mgmt: −$310
• Net cashflow: $-202/mo
• Annual: $-2,419/yr
• Cap rate: 4.36%
• Cash-on-cash: -6.91%
• DSCR: 0.69
• 1% rule: 1.18%
• Cash to close: $35,000

Investor read

• This is a 1-bed/1.0-bath condo listed at $125k.
• At list price, monthly cash flow is $-202 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $89k (28.5% below list).
• Meets the 1% rule at list price ($1k rent vs $125k).
• It's been on market 204 days — a 12% lower offer ($110k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $89k (28.5% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#82 in MN, #1,926 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, commute A+; Watch: amenities F, cost of living F.
• Richfield Public School District (suburban): math 27% / reading 38% proficiency, ranked #262 of 301 in MN (top 87%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 35% of rent.
• Market conditions: Rents flat; 67 active listings in the ZIP; 23 comparable units currently listed for rent nearby; rentals leasing fast (median 6d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $18k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.4% vs local median 1.8% in Edina — 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?
• It's been on market 204 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• Built in 1964 — 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?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?