303 N Broad St

Mankato, MN 56001

$390,000C+

5 bd · 4.0 ba · 3,706 sqft · Built 1885 · MultiFamily · Active · 63 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,501/mo
• Mortgage (P&I): −$2,045
• Tax + insurance: −$612
• HOA: −$0
• Vac / Maint / Mgmt: −$945
• Net cashflow: $899/mo
• Annual: $10,785/yr
• Cap rate: 9.06%
• Cash-on-cash: 9.88%
• DSCR: 1.44
• 1% rule: 1.15%
• Cash to close: $109,200

Investor read

• This is a 1×2bd/1ba + 3×1bd/1ba units multifamily listed at $390k.
• At list price, monthly cash flow is $899 ($11k/yr) — positive. Per door: $225/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $390k).
• It's been on market 63 days — a 6% lower offer ($367k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $367k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k 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.
• Watch-outs: built in 1885 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.6%/yr); 352 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• Current owner paid $330k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $109k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 9.1% vs local median 3.4% 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 $4,501/mo this rent would consume 78% 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

• It's been on market 63 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• 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 1885 — 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.
• 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.