808 2nd Ave NW

Byron, MN 55920

$200,000D

3 bd · 1.0 ba · 1,056 sqft · Built 1963 · SingleFamily · Pending · 4 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,673/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$326
• HOA: −$0
• Vac / Maint / Mgmt: −$351
• Net cashflow: $-54/mo
• Annual: $-647/yr
• Cap rate: 5.97%
• Cash-on-cash: -1.16%
• DSCR: 0.95
• 1% rule: 0.84%
• Cash to close: $56,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-54 ($-647/yr) — negative.
• To cash-flow at today's rent, offer at most $190k (4.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $167k (16.4% below list).
• Only 4 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $167k (16.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#30 in MN, #956 nationally) — a professional / high-income tenant draw. Strengths: commute A+, employment A+, housing A+; Watch: amenities F, health & safety D-.
• Byron Public School District (town): math 60% / reading 63% proficiency, ranked #24 of 301 in MN (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Market conditions: 162 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 16y 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.
• Cap rate 6.0% vs local median 2.5% in Byron — 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?
• Built in 1963 — 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.
• Schools are A-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.