315 1st St SE

Clara City, MN 56222

$165,000B

4 bd · 2.0 ba · 2,150 sqft · Built 1915 · SingleFamily · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,800/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$281
• HOA: −$0
• Vac / Maint / Mgmt: −$798
• Net cashflow: $1,856/mo
• Annual: $22,272/yr
• Cap rate: 19.79%
• Cash-on-cash: 48.21%
• DSCR: 3.14
• 1% rule: 2.30%
• Cash to close: $46,200

Investor read

• This is a 4-bed/2.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $2k ($22k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $165k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#244 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment D-.
• Maccray School District (rural): math 41% / reading 46% proficiency, ranked #188 of 301 in MN (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Maccray West Elementary (math 57% / reading 52%); Maccray Secondary (math 27% / reading 42%, grade F, #306 of 471 statewide, top 70%, 366 students, 49% FRL) — zoned schools average 49% FRL vs 30% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 13 units permitted in Chippewa County in 2024 (0 in 5+ unit buildings).
• Chippewa County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $46k cash investment doubles in ~3 years — after that, you're playing with house money.

Questions for listing agent

• Built in 1915 — 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.
• 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.