2804 Pillsbury Ave S

Minneapolis, MN 55408

$220,000C-

3 bd · 1.0 ba · 1,401 sqft · Built 1900 · SingleFamily · Pending · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,987/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$304
• HOA: −$0
• Vac / Maint / Mgmt: −$417
• Net cashflow: $112/mo
• Annual: $1,341/yr
• Cap rate: 6.90%
• Cash-on-cash: 2.18%
• DSCR: 1.10
• 1% rule: 0.90%
• Cash to close: $61,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $220k.
• At list price, monthly cash flow is $112 ($1k/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 $199k (9.7% below list).
• It's been on market 42 days — a 3% lower offer ($213k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $199k (9.7% below list) — sets the bar for 1% rule.
• 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 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.8%/yr); 175 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 15 sale attempts since 15y ago; this cycle's ask has dropped $20k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $164k; 34% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.9% vs local median 3.1% in Minneapolis — 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 34% of the median local income ($70k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 42 days. Have you received any prior offers? Is the seller open to a 10% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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.
• 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.
• 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.