603 2nd St SE

Baudette, MN 56623

$89,500C-

2 bd · 1.0 ba · 1,008 sqft · Built 1994 · SingleFamily · Pending · 143 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $934/mo
• Mortgage (P&I): −$469
• Tax + insurance: −$116
• HOA: −$0
• Vac / Maint / Mgmt: −$196
• Net cashflow: $152/mo
• Annual: $1,827/yr
• Cap rate: 8.33%
• Cash-on-cash: 7.29%
• DSCR: 1.32
• 1% rule: 1.04%
• Cash to close: $25,060

Investor read

• This is a 2-bed/1.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $152 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($934 rent vs $90k).
• It's been on market 143 days — a 12% lower offer ($79k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $619 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#243 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: crime D+, amenities F, commute F.
• Lake Of The Woods School District (rural): math 30% / reading 39% proficiency, ranked #259 of 301 in MN (top 86%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Lake of The Woods Elementary (math 37% / reading 42%, grade F, #604 of 857 statewide, top 74%, 255 students, 45% FRL); Lake of The Woods Secondary (math 22% / reading 32%, grade F, #369 of 471 statewide, top 79%, 191 students, 40% FRL).
• Market conditions: 99 active listings in the ZIP; 13 units permitted in Lake of the Woods County in 2024 (0 in 5+ unit buildings).
• Lake of the Woods County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 15y ago; this cycle's ask has dropped $10k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $56k; list at $90k implies a 61% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• It's been on market 143 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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.
• 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?
• 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.