2606 Pearl Ct SE

Rochester, MN 55904

$289,999D

4 bd · 2.0 ba · 1,671 sqft · Built 1958 · SingleFamily · Coming Soon · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,392/mo
• Mortgage (P&I): −$1,521
• Tax + insurance: −$372
• HOA: −$0
• Vac / Maint / Mgmt: −$502
• Net cashflow: $-4/mo
• Annual: $-44/yr
• Cap rate: 6.28%
• Cash-on-cash: -0.05%
• DSCR: 1.00
• 1% rule: 0.82%
• Cash to close: $81,200

Investor read

• This is a 4-bed/2.0-bath single-family listed at $290k.
• At list price, monthly cash flow is $-4 ($-44/yr) — negative.
• To cash-flow at today's rent, offer at most $289k (0.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $239k (17.5% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $239k (17.5% 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 $9k of value loss. Plan a longer hold.
• Location reads 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Pinewood Elementary (math 47% / reading 57%, grade C-, #368 of 857 statewide, top 47%, 308 students, 29% FRL); Willow Creek Middle (math 19% / reading 36%, grade F, #213 of 258 statewide, top 82%, 890 students, 45% FRL); Mayo Senior High (math 42% / reading 65%, grade C-, #104 of 471 statewide, top 22%, 1,862 students, 31% FRL) — zoned schools at 35% FRL track the district average.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.1%/yr); 151 active listings in the ZIP; solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $127k; list at $290k implies a 128% gain — meaningful room to come down on a strong offer.
• Cap rate 6.3% vs local median 3.6% in Rochester — 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.
• This rent runs 37% of the median local income ($77k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1958 — 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 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.
• 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.