706 Minnesota Ave NW

Bemidji, MN 56601

$189,900C

4 bd · 2.0 ba · 1,376 sqft · Built 1900 · Other · Active · 515 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,968/mo
• Mortgage (P&I): −$996
• Tax + insurance: −$258
• HOA: −$0
• Vac / Maint / Mgmt: −$413
• Net cashflow: $301/mo
• Annual: $3,616/yr
• Cap rate: 8.20%
• Cash-on-cash: 6.80%
• DSCR: 1.30
• 1% rule: 1.04%
• Cash to close: $53,172

Investor read

• This is a 4-bed/2.0-bath other listed at $190k.
• At list price, monthly cash flow is $301 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $190k).
• It's been on market 515 days — a 12% lower offer ($167k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $167k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#252 in MN) — a middle-class / working-renter tenant base. Strengths: amenities A+, cost of living A+, health & safety A+; Watch: crime F, commute F, employment F.
• Bemidji Public School District (rural): math 42% / reading 50% proficiency, ranked #173 of 301 in MN (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Paul Bunyan Center (96 students, 64% FRL); Bemidji Middle (math 37% / reading 46%, grade F, #138 of 258 statewide, top 55%, 1,013 students, 48% FRL); Bemidji Senior High (math 47% / reading 67%, grade C, #64 of 471 statewide, top 16%, 1,432 students, 38% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.0%/yr); 346 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 165 units permitted in Beltrami County in 2024 (81 in 5+ unit buildings).
• 6 sale attempts since 22y 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 $119k; list at $190k implies a 60% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.2% vs local median 4.3% in Bemidji — 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 33% of the median local income ($72k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 515 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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.
• Schools are B-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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.