13834 Flay Ave N

Hugo, MN 55038

$260,000C-

3 bd · 2.0 ba · 1,488 sqft · Built 2000 · Townhouse · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,595/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$350
• HOA: −$238
• Vac / Maint / Mgmt: −$545
• Net cashflow: $99/mo
• Annual: $1,183/yr
• Cap rate: 6.75%
• Cash-on-cash: 1.63%
• DSCR: 1.07
• 1% rule: 1.00%
• Cash to close: $72,800

Investor read

• This is a 3-bed/2.0-bath townhouse listed at $260k.
• At list price, monthly cash flow is $99 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $260k (0.2% below list).
• It's been on market 33 days — a 3% lower offer ($252k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $252k (3.0% below list) — sets the bar for market timing.
• 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 71/100 on livability (#314 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A-; Watch: amenities F, commute F, health & safety F.
• White Bear Lake School District (suburban): math 45% / reading 57% proficiency, ranked #83 of 301 in MN (top 28%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Matoska International (math 45% / reading 54%, grade D, #423 of 857 statewide, top 55%, 554 students, 24% FRL); Central Middle (math 41% / reading 55%, grade C-, #90 of 258 statewide, top 35%, 1,020 students, 24% FRL); White Bear South Campus Senior (math 37%, 1,111 students, 26% FRL) — zoned schools at 25% FRL track the district average.
• Market conditions: 278 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 1,405 units permitted in Washington County in 2024 (121 in 5+ unit buildings).
• Washington County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 17y 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.
• Current owner paid $136k; list at $260k implies a 91% gain — meaningful room to come down on a strong offer.
• Cap rate 6.7% vs local median 3.1% in Hugo — 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

• It's been on market 33 days. Have you received any prior offers? Is the seller open to a 3% 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?
• 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.
• 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.