4680 Tower St SE #112

Prior Lake, MN 55372

$100,000C+

2 bd · 1.0 ba · 667 sqft · Built 1988 · Condo · Pending · 97 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,545/mo
• Mortgage (P&I): −$524
• Tax + insurance: −$112
• HOA: −$406
• Vac / Maint / Mgmt: −$325
• Net cashflow: $179/mo
• Annual: $2,142/yr
• Cap rate: 8.44%
• Cash-on-cash: 7.65%
• DSCR: 1.34
• 1% rule: 1.55%
• Cash to close: $28,000

Investor read

• This is a 2-bed/1.0-bath condo listed at $100k.
• At list price, monthly cash flow is $179 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $100k).
• It's been on market 97 days — a 9% lower offer ($91k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $91k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $691 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#308 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living D-.
• Prior Lake-Savage Area Schools (suburban): math 56% / reading 59% proficiency, ranked #32 of 301 in MN (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Watch-outs: HOA is 26% of rent.
• Market conditions: Rents rising (+2.2%/yr); 259 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 699 units permitted in Scott County in 2024 (84 in 5+ unit buildings).
• Scott County population projected at +31% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 21y ago; this cycle's ask has dropped $10k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $87k; 15% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 8.4% vs local median 2.2% in Prior Lake — 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 is only 13% of the median local income ($145k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• It's been on market 97 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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.