821 3rd Ave

Madison, MN 56256

$109,900C-

3 bd · 1.0 ba · 1,141 sqft · Built 1903 · Other · Active · 364 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,139/mo
• Mortgage (P&I): −$576
• Tax + insurance: −$183
• HOA: −$0
• Vac / Maint / Mgmt: −$239
• Net cashflow: $140/mo
• Annual: $1,684/yr
• Cap rate: 7.83%
• Cash-on-cash: 5.47%
• DSCR: 1.24
• 1% rule: 1.04%
• Cash to close: $30,772

Investor read

• This is a 3-bed/1.0-bath other listed at $110k.
• At list price, monthly cash flow is $140 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $110k).
• It's been on market 364 days — a 12% lower offer ($97k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $97k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $760 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#175 in MN, #3,796 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, amenities F, commute F.
• Lac Qui Parle Valley School District (rural): math 44% / reading 44% proficiency, ranked #193 of 301 in MN (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Appleton Elementary (math 32% / reading 22%, grade F, #703 of 857 statewide, top 84%, 206 students, 72% FRL); Lac Qui Parle Valley Middle School (math 47% / reading 52%, grade C, #81 of 258 statewide, top 32%, 125 students, 62% FRL); Lac Qui Parle Valley Secondary (math 37% / reading 47%, grade F, #222 of 471 statewide, top 50%, 334 students, 52% FRL) — zoned schools average 62% FRL vs 30% district-wide (32 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1903 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 17 active listings in the ZIP; 9 units permitted in Lac qui Parle County in 2024 (0 in 5+ unit buildings).
• Lac qui Parle County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 9y ago; this cycle's ask has dropped $40k (27%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $20k; list at $110k implies a 450% gain — meaningful room to come down on a strong offer.

Questions for listing agent

• It's been on market 364 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1903 — 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.
• 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.