503 Franklin Ave

Crosby, MN 56441

$169,900D

2 bd · 2.0 ba · 756 sqft · Built 1940 · SingleFamily · Active · 99 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $789/mo
• Mortgage (P&I): −$891
• Tax + insurance: −$207
• HOA: −$0
• Vac / Maint / Mgmt: −$166
• Net cashflow: $-475/mo
• Annual: $-5,698/yr
• Cap rate: 2.94%
• Cash-on-cash: -11.98%
• DSCR: 0.47
• 1% rule: 0.46%
• Cash to close: $47,572

Investor read

• This is a 2-bed/2.0-bath single-family listed at $170k.
• At list price, monthly cash flow is $-475 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $86k (49.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $79k (53.6% below list).
• It's been on market 99 days — a 9% lower offer ($155k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $79k (53.6% below list) — sets the bar for 1% rule.
• In year one you build about $18k of equity ($1k loan paydown + $17k appreciation (10.0% local appreciation)).
• Location reads 66/100 on livability (#471 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: schools C-, health & safety C-, amenities F.
• Crosby-Ironton Public School District (town): math 38% / reading 52% proficiency, ranked #184 of 301 in MN (top 61%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 45 active listings in the ZIP; 420 units permitted in Crow Wing County in 2024 (17 in 5+ unit buildings).
• Crow Wing County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 5 sale attempts since 12y 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 $63k; list at $170k implies a 170% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$46k 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

• 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?
• It's been on market 99 days. Have you received any prior offers? Is the seller open to a 54% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.