18634 Euclid Path

Farmington, MN 55024

$375,000D

5 bd · 3.0 ba · 2,248 sqft · Built 1995 · SingleFamily · Pending · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,026/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$619
• HOA: −$0
• Vac / Maint / Mgmt: −$635
• Net cashflow: $-195/mo
• Annual: $-2,337/yr
• Cap rate: 5.67%
• Cash-on-cash: -2.23%
• DSCR: 0.90
• 1% rule: 0.81%
• Cash to close: $105,000

Investor read

• This is a 5-bed/3.0-bath single-family listed at $375k.
• At list price, monthly cash flow is $-195 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $341k (9.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $303k (19.3% below list).
• It's been on market 30 days — a 2% lower offer ($369k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $303k (19.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#203 in MN, #4,269 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F.
• Farmington Public School District (suburban): math 43% / reading 52% proficiency, ranked #104 of 301 in MN (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 12% free/reduced lunch — higher-income household profile.
• Zoned schools: Meadowview Elementary (math 60% / reading 58%, grade B-, #247 of 857 statewide, top 29%, 627 students, 31% FRL); Robert Boeckman Middle School (math 41% / reading 51%, grade D+, #103 of 258 statewide, top 40%, 878 students, 25% FRL); Farmington High School (math 32% / reading 56%, grade F, #210 of 471 statewide, top 44%, 2,201 students, 22% FRL).
• Market conditions: 327 active listings in the ZIP; 1 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.
• 3 sale attempts since 19y ago; this cycle's ask has dropped $55k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $261k; 44% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.7% vs local median 3.7% in Farmington — 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 do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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.