8580 Atlantic Ave

Inver Grove Heights, MN 55077

$39,500D+

3 bd · 2.0 ba · 1,232 sqft · Built 2005 · SingleFamily · Pending · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,510/mo
• Mortgage (P&I): −$207
• Tax + insurance: −$132
• HOA: −$0
• Vac / Maint / Mgmt: −$527
• Net cashflow: $1,643/mo
• Annual: $19,719/yr
• Cap rate: 58.23%
• Cash-on-cash: 185.50%
• DSCR: 9.25
• 1% rule: 6.35%
• Cash to close: $11,060

Investor read

• This is a 3-bed/2.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $2k ($20k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $40k).
• It's been on market 23 days — a 2% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $273 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#146 in MN, #3,277 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, housing A+; Watch: amenities F, health & safety F.
• Rosemount-Apple Valley-Eagan (suburban): math 50% / reading 58% proficiency, ranked #58 of 301 in MN (top 19%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 18% free/reduced lunch — higher-income household profile.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising (+1.4%/yr); 87 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 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.
• At projected returns (-3.0% appreciation + 1.4% rent growth), your $11k cash investment doubles in ~1 year — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 58.2% vs local median 3.2% in Inver Grove 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

• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.