319 3rd St SW

Clara City, MN 56222

$122,500B

3 bd · 1.0 ba · 1,194 sqft · Built 1957 · SingleFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,668/mo
• Mortgage (P&I): −$642
• Tax + insurance: −$203
• HOA: −$0
• Vac / Maint / Mgmt: −$560
• Net cashflow: $1,262/mo
• Annual: $15,139/yr
• Cap rate: 18.65%
• Cash-on-cash: 44.14%
• DSCR: 2.96
• 1% rule: 2.18%
• Cash to close: $34,300

Investor read

• This is a 3-bed/1.0-bath single-family listed at $122k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $122k).
• It's been on market 15 days — a 2% lower offer ($121k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $847 of loan paydown is wiped out by about $4k 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 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 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.
• 6 sale attempts since 14y 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 $100k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~3 years — after that, you're playing with house money.

Questions for listing agent

• Built in 1957 — 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.