6876 Wels Ave

Baxter, MN 56401

$220,000F

2 bd · 2.0 ba · 1,764 sqft · Built 1975 · SingleFamily · Active · 254 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,306/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$180
• HOA: −$0
• Vac / Maint / Mgmt: −$274
• Net cashflow: $-302/mo
• Annual: $-3,628/yr
• Cap rate: 4.64%
• Cash-on-cash: -5.89%
• DSCR: 0.74
• 1% rule: 0.59%
• Cash to close: $61,600

Investor read

• This is a 2-bed/2.0-bath single-family listed at $220k.
• At list price, monthly cash flow is $-302 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $167k (24.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $131k (40.6% below list).
• It's been on market 254 days — a 12% lower offer ($194k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $131k (40.6% 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 70/100 on livability (#339 in MN) — a middle-class / working-renter tenant base. Strengths: schools A+, housing A+, employment A; Watch: health & safety C-, amenities F, commute F.
• Brainerd Public School District (town): math 49% / reading 58% proficiency, ranked #85 of 301 in MN (top 28%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 401 active listings in the ZIP; 420 units permitted in Crow Wing County in 2024 (17 in 5+ unit buildings).
• Crow Wing County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 4y 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 $117k; list at $220k implies a 88% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.6% vs local median 2.7% in Baxter — 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 254 days. Have you received any prior offers? Is the seller open to a 41% concession, seller financing, or rate buy-down credit?
• Built in 1975 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.