877 Cottage Ave E

St. Paul, MN 55106

$375,000D

4 bd · 2.0 ba · 2,482 sqft · Built 1922 · MultiFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,485/mo
• Mortgage (P&I): −$1,967
• Tax + insurance: −$786
• HOA: −$0
• Vac / Maint / Mgmt: −$732
• Net cashflow: $0/mo
• Annual: $2/yr
• Cap rate: 6.29%
• Cash-on-cash: 0.00%
• DSCR: 1.00
• 1% rule: 0.93%
• Cash to close: $105,000

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $375k.
• At list price, monthly cash flow is $0 ($2/yr) — positive. Per door: $0/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $348k (7.1% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $348k (7.1% 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: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• St. Paul Public School District (urban): math 21% / reading 33% proficiency, ranked #270 of 301 in MN (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Phalen Lake Hmong Studies Magnet (math 22% / reading 22%, grade F, #732 of 857 statewide, top 88%, 670 students, 82% FRL); Parkway Montessori/Community Middle (math 8% / reading 22%); Johnson Senior High (math 30% / reading 30%, grade F, #345 of 471 statewide, top 74%, 1,144 students, 83% FRL) — zoned schools average 83% FRL vs 64% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1922 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.3%/yr); 254 active listings in the ZIP; 1,202 units permitted in Ramsey County in 2024 (880 in 5+ unit buildings).
• Ramsey County population projected at +27% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 23y 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.
• At $3,485/mo this rent would consume 60% of the median local household income ($70k/yr) (locally 2046% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1922 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.