818 Park Avenue North

St. James, MN 56081

$80,000B-

2 bd · 1.0 ba · 894 sqft · Built 1910 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $825/mo
• Mortgage (P&I): −$420
• Tax + insurance: −$82
• HOA: −$0
• Vac / Maint / Mgmt: −$173
• Net cashflow: $150/mo
• Annual: $1,805/yr
• Cap rate: 8.55%
• Cash-on-cash: 8.06%
• DSCR: 1.36
• 1% rule: 1.03%
• Cash to close: $22,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $80k.
• At list price, monthly cash flow is $150 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($825 rent vs $80k).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $8k of equity ($553 loan paydown + $7k appreciation (9.0% local appreciation)).
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• St. James Public School District (town): math 36% / reading 43% proficiency, ranked #226 of 301 in MN (top 75%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 32 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• Current owner paid $13k; list at $80k implies a 515% gain — meaningful room to come down on a strong offer.
• At projected returns (9.0% appreciation + 3.0% rent growth), your $22k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$36k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 8.5% vs local median 3.5% in St. James — 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

• Built in 1910 — 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.