428 Commodore Dr

Mankato, MN 56001

$1,495,000B

None bd · None ba · 14,280 sqft · Built 1964 · MultiFamily · Pending · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $21,183/mo
• Mortgage (P&I): −$7,840
• Tax + insurance: −$1,450
• HOA: −$0
• Vac / Maint / Mgmt: −$4,448
• Net cashflow: $7,445/mo
• Annual: $89,335/yr
• Cap rate: 12.27%
• Cash-on-cash: 21.34%
• DSCR: 1.95
• 1% rule: 1.42%
• Cash to close: $418,600

Investor read

• This is a 14×2bd/1.5ba + 2×1bd/1.5ba units multifamily listed at $1.50M.
• At list price, monthly cash flow is $7k ($89k/yr) — positive. Per door: $465/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($21k rent vs $1.50M).
• It's been on market 18 days — a 2% lower offer ($1.47M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.47M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#133 in MN, #2,970 nationally) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, cost of living A; Watch: crime C-, amenities C-, commute F.
• Mankato Public School District (urban): math 48% / reading 56% proficiency, ranked #98 of 301 in MN (top 33%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Kennedy Elementary (math 57% / reading 47%, grade C-, #368 of 857 statewide, top 47%, 370 students, 52% FRL); Prairie Winds Middle School (math 40% / reading 51%, grade D+, #106 of 258 statewide, top 43%, 954 students, 47% FRL); Mankato East Senior High (math 32% / reading 62%, grade D-, #166 of 471 statewide, top 39%, 1,293 students, 42% FRL) — zoned schools average 47% FRL vs 29% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+8.6%/yr); 359 active listings in the ZIP; 269 units permitted in Blue Earth County in 2024 (154 in 5+ unit buildings).
• Blue Earth County population projected at +18% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 3y 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.
• Current owner paid $400k; list at $1.50M implies a 274% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $419k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 12.3% vs local median 3.5% in Mankato — 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.
• At $21,183/mo this rent would consume 366% of the median local household income ($70k/yr) (locally 2394% 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 1964 — 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 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?
• 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.