440 E Main St

Madelia, MN 56062

$96,000A-

3 bd · 2.0 ba · 1,239 sqft · Built 1940 · SingleFamily · Pending · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,327/mo
• Mortgage (P&I): −$503
• Tax + insurance: −$229
• HOA: −$0
• Vac / Maint / Mgmt: −$279
• Net cashflow: $316/mo
• Annual: $3,791/yr
• Cap rate: 10.24%
• Cash-on-cash: 14.10%
• DSCR: 1.63
• 1% rule: 1.38%
• Cash to close: $26,880

Investor read

• This is a 3-bed/2.0-bath single-family listed at $96k.
• At list price, monthly cash flow is $316 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $96k).
• It's been on market 23 days — a 2% lower offer ($95k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $95k (1.5% below list) — sets the bar for market timing.
• In year one you build about $5k of equity ($664 loan paydown + $4k appreciation (4.3% local appreciation)).
• Location reads 81/100 on livability (#60 in MN, #1,406 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Madelia Public School District (rural): math 40% / reading 42% proficiency, ranked #215 of 301 in MN (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 19 active listings in the ZIP; 4 units permitted in Watonwan County in 2024 (0 in 5+ unit buildings).
• Watonwan County population projected to shrink 10% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 6y 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.
• At projected returns (4.3% appreciation + 3.0% rent growth), your $27k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1940 — 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.
• 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.