312 2nd St N

Delano, MN 55328

$265,000D-

3 bd · 2.0 ba · 1,393 sqft · Built 1900 · Other · Active · 77 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,576/mo
• Mortgage (P&I): −$1,390
• Tax + insurance: −$227
• HOA: −$0
• Vac / Maint / Mgmt: −$331
• Net cashflow: $-372/mo
• Annual: $-4,468/yr
• Cap rate: 4.61%
• Cash-on-cash: -6.02%
• DSCR: 0.73
• 1% rule: 0.59%
• Cash to close: $74,200

Investor read

• This is a 3-bed/2.0-bath other listed at $265k.
• At list price, monthly cash flow is $-372 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $199k (24.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $158k (40.5% below list).
• It's been on market 77 days — a 6% lower offer ($249k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $158k (40.5% 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 $8k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#160 in MN, #3,448 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, employment A+, housing A+; Watch: amenities F, commute F.
• Delano Public School District (town): math 70% / reading 73% proficiency, ranked #8 of 301 in MN (top 3%) — strong family-tenant draw, lease renewals of 3-5y typical; only 8% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 155 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 1,260 units permitted in Wright County in 2024 (180 in 5+ unit buildings).
• Wright County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 21y 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.
• Cap rate 4.6% vs local median 1.7% in Delano — 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 77 days. Have you received any prior offers? Is the seller open to a 41% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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.