7632 Pleasant Ave

Richfield, MN 55423

$599,900C-

28 bd · 16.0 ba · 4,008 sqft · Built 1966 · MultiFamily · Active · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,224/mo
• Mortgage (P&I): −$3,146
• Tax + insurance: −$993
• HOA: −$0
• Vac / Maint / Mgmt: −$1,307
• Net cashflow: $778/mo
• Annual: $9,332/yr
• Cap rate: 7.85%
• Cash-on-cash: 5.56%
• DSCR: 1.25
• 1% rule: 1.04%
• Cash to close: $167,972

Investor read

• This is a 3×2bd/1ba + 1×1bd/1ba units multifamily listed at $600k.
• At list price, monthly cash flow is $778 ($9k/yr) — positive. Per door: $194/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $600k).
• It's been on market 69 days — a 6% lower offer ($564k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $564k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads 85/100 on livability (#22 in MN, #599 nationally) — a professional / high-income tenant draw. Strengths: commute A+, housing A+, employment A; Watch: crime C-.
• Richfield Public School District (suburban): math 27% / reading 38% proficiency, ranked #262 of 301 in MN (top 87%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.7%/yr); 155 active listings in the ZIP; solid renter incomes; 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.
• 2 sale attempts since 17y 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 $486k; 23% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.8% vs local median 3.6% in Richfield — 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.
• At $6,224/mo this rent would consume 88% of the median local household income ($85k/yr) (locally 1472% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 69 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1966 — 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.
• 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.