304 Sanderson St

Red Wing, MN 55066

$105,000B-

2 bd · 1.0 ba · 672 sqft · Built 1870 · SingleFamily · Pending · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,397/mo
• Mortgage (P&I): −$551
• Tax + insurance: −$122
• HOA: −$0
• Vac / Maint / Mgmt: −$293
• Net cashflow: $431/mo
• Annual: $5,174/yr
• Cap rate: 11.22%
• Cash-on-cash: 17.60%
• DSCR: 1.78
• 1% rule: 1.33%
• Cash to close: $29,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $105k.
• At list price, monthly cash flow is $431 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $105k).
• It's been on market 57 days — a 3% lower offer ($102k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $102k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $726 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#64 in MN, #1,570 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D.
• Red Wing Public School District (rural): math 36% / reading 44% proficiency, ranked #220 of 301 in MN (top 73%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1870 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 142 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 86 units permitted in Goodhue County in 2024 (0 in 5+ unit buildings).
• Goodhue County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 18y ago; this cycle's ask is 17% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $67k; list at $105k implies a 57% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $29k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.2% vs local median 3.5% in Red Wing — 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 57 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1870 — 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.
• 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.