2556 Lockwood Dr #59

Mendota Heights, MN 55120

$241,500C+

2 bd · 2.0 ba · 1,228 sqft · Built 1992 · Townhouse · Active · 107 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,983/mo
• Mortgage (P&I): −$1,266
• Tax + insurance: −$278
• HOA: −$324
• Vac / Maint / Mgmt: −$626
• Net cashflow: $488/mo
• Annual: $5,857/yr
• Cap rate: 8.72%
• Cash-on-cash: 8.66%
• DSCR: 1.39
• 1% rule: 1.24%
• Cash to close: $67,620

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $242k.
• At list price, monthly cash flow is $488 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $242k).
• It's been on market 107 days — a 9% lower offer ($220k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $220k (9.0% 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 $7k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#26 in MN, #828 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: amenities F, cost of living F.
• West St. Paul-Mendota Hts.-Eagan (suburban): math 42% / reading 54% proficiency, ranked #125 of 301 in MN (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mendota Elementary (math 87% / reading 72%, grade A, #12 of 857 statewide, top 2%, 392 students, 21% FRL); Friendly Hills Middle (math 38% / reading 52%, grade D, #113 of 258 statewide, top 45%, 735 students, 44% FRL); Two Rivers High School (math 52% / reading 57%, grade C-, #87 of 471 statewide, top 22%, 1,479 students, 47% FRL) — zoned schools at 37% FRL track the district average.
• Market conditions: 17 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 4y ago; this cycle's ask has dropped $13k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 8.7% vs local median 1.3% in Mendota Heights — 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 107 days. Have you received any prior offers? Is the seller open to a 9% 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?
• 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 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.