3357 Locust Rd

Mabel, MN 52101

$230,000D

3 bd · 1.0 ba · 1,290 sqft · Built 1920 · SingleFamily · Pending · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,592/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$214
• HOA: −$0
• Vac / Maint / Mgmt: −$334
• Net cashflow: $-163/mo
• Annual: $-1,952/yr
• Cap rate: 5.44%
• Cash-on-cash: -3.03%
• DSCR: 0.87
• 1% rule: 0.69%
• Cash to close: $64,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $230k.
• At list price, monthly cash flow is $-163 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $201k (12.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $159k (30.8% below list).
• It's been on market 28 days — a 2% lower offer ($227k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $159k (30.8% 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 73/100 on livability (#258 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D+, amenities F, commute F.
• Decorah Community School District (town): math 80% / reading 84% proficiency, ranked #21 of 289 in IA (top 7%) — strong family-tenant draw, lease renewals of 3-5y typical; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: John Cline Elementary School (354 students, 28% FRL); Decorah Middle School (math 77% / reading 83%, grade A+, #32 of 246 statewide, top 13%, 461 students, 26% FRL); Decorah High School (math 85% / reading 92%, grade A, #3 of 336 statewide, top 1%, 576 students, 22% FRL).
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 49 units permitted in Winneshiek County in 2024 (0 in 5+ unit buildings).
• Winneshiek County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $73k; list at $230k implies a 215% 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?
• Built in 1920 — 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 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?
• Crime grade is D 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?
• 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.