631 N Cedar St

Luverne, MN 56156

$127,900C-

4 bd · 2.0 ba · 784 sqft · Built 1915 · SingleFamily · Active · 114 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,125/mo
• Mortgage (P&I): −$671
• Tax + insurance: −$156
• HOA: −$0
• Vac / Maint / Mgmt: −$236
• Net cashflow: $62/mo
• Annual: $739/yr
• Cap rate: 6.87%
• Cash-on-cash: 2.06%
• DSCR: 1.09
• 1% rule: 0.88%
• Cash to close: $35,812

Investor read

• This is a 4-bed/2.0-bath single-family listed at $128k.
• At list price, monthly cash flow is $62 ($739/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 $112k (12.0% below list).
• It's been on market 114 days — a 9% lower offer ($116k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (12.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $884 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 86/100 on livability (#14 in MN, #455 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute F.
• Luverne Public School District (rural): math 55% / reading 58% proficiency, ranked #64 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Luverne Elementary (math 59% / reading 61%, grade B-, #209 of 857 statewide, top 25%, 524 students, 43% FRL); Luverne Middle (math 54% / reading 56%, grade B-, #45 of 258 statewide, top 18%, 255 students, 38% FRL); Luverne Senior High (math 47% / reading 57%, grade D+, #111 of 471 statewide, top 26%, 378 students, 28% FRL).
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 65 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 66 units permitted in Rock County in 2024 (50 in 5+ unit buildings).
• Rock County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts 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 $57k; list at $128k implies a 124% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.9% vs local median 3.5% in Luverne — 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 114 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1915 — 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?
• 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.