204 5th St E

Lancaster, MN 56735

$32,500B+

3 bd · 1.0 ba · 924 sqft · Built 1916 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $907/mo
• Mortgage (P&I): −$170
• Tax + insurance: −$113
• HOA: −$0
• Vac / Maint / Mgmt: −$191
• Net cashflow: $434/mo
• Annual: $5,205/yr
• Cap rate: 22.31%
• Cash-on-cash: 57.20%
• DSCR: 3.55
• 1% rule: 2.79%
• Cash to close: $9,100

Investor read

• This is a 3-bed/1.0-bath single-family listed at $32k.
• At list price, monthly cash flow is $434 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($907 rent vs $32k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $1k of equity ($225 loan paydown + $975 appreciation (3.0% local appreciation)).
• Location reads 67/100 on livability (#428 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools B+; Watch: crime C-, health & safety D+, employment D.
• Lancaster Public School District (rural): math 50% / reading 70% proficiency, ranked #147 of 467 in MN (top 32%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: property tax is 3.7% of price; built in 1916 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 3 active listings in the ZIP; 4 units permitted in Kittson County in 2024 (0 in 5+ unit buildings).
• Kittson County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $9k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; severe wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• Built in 1916 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.