706 E 11th St

Duluth, MN 55805

$200,000C

3 bd · 1.0 ba · 1,154 sqft · Built 1911 · SingleFamily · Pending · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,927/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$257
• HOA: −$0
• Vac / Maint / Mgmt: −$405
• Net cashflow: $217/mo
• Annual: $2,604/yr
• Cap rate: 7.59%
• Cash-on-cash: 4.65%
• DSCR: 1.21
• 1% rule: 0.96%
• Cash to close: $56,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $217 ($3k/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 $193k (3.6% below list).
• It's been on market 57 days — a 3% lower offer ($194k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $193k (3.6% 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 $6k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#36 in MN, #1,060 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Duluth Public School District (urban): math 44% / reading 55% proficiency, ranked #132 of 301 in MN (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1911 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.3%/yr); 42 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $30k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $86k; list at $200k implies a 133% gain — meaningful room to come down on a strong offer.
• Cap rate 7.6% vs local median 4.9% in Duluth — 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.
• At $1,927/mo this rent would consume 54% of the median local household income ($43k/yr) (locally 927% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 57 days. Have you received any prior offers? Is the seller open to a 4% concession, seller financing, or rate buy-down credit?
• Built in 1911 — 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?
• 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.