4295 Mallard Pl SE

Rochester, MN 55904

$126,000B

2 bd · 1.0 ba · 1,124 sqft · Built 2004 · Townhouse · Pending

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,920/mo
• Mortgage (P&I): −$661
• Tax + insurance: −$210
• HOA: −$195
• Vac / Maint / Mgmt: −$403
• Net cashflow: $451/mo
• Annual: $5,408/yr
• Cap rate: 10.59%
• Cash-on-cash: 15.33%
• DSCR: 1.68
• 1% rule: 1.52%
• Cash to close: $35,280

Investor read

• This is a 2-bed/1.0-bath townhouse listed at $126k.
• At list price, monthly cash flow is $451 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $126k).
• Only 0 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $871 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Pinewood Elementary (math 47% / reading 57%, grade C-, #368 of 857 statewide, top 47%, 308 students, 29% FRL); Mayo Senior High (math 42% / reading 65%, grade C-, #104 of 471 statewide, top 22%, 1,862 students, 31% FRL) — zoned schools at 30% FRL track the district average.
• Market conditions: Rents rising (+2.1%/yr); 149 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 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 $104k; 21% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 2.1% rent growth), your $35k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 10.6% vs local median 3.5% in Rochester — 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

• 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.