3217 Vermilion Trl

Makinen, MN 55763

$89,900D+

1 bd · None ba · 676 sqft · Built 2014 · Other · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $791/mo
• Mortgage (P&I): −$471
• Tax + insurance: −$142
• HOA: −$0
• Vac / Maint / Mgmt: −$166
• Net cashflow: $12/mo
• Annual: $143/yr
• Cap rate: 6.45%
• Cash-on-cash: 0.57%
• DSCR: 1.03
• 1% rule: 0.88%
• Cash to close: $25,172

Investor read

• This is a 1-bed/?-bath other listed at $90k.
• At list price, monthly cash flow is $12 ($143/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 $79k (12.0% below list).
• It's been on market 25 days — a 2% lower offer ($89k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (12.0% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($622 loan paydown + $5k appreciation (5.9% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Mesabi East School District (rural): math 27% / reading 47% proficiency, ranked #240 of 301 in MN (top 80%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 14 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 5 sale attempts 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 $69k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (5.9% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• 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.