612 2nd St W

Northfield, MN 55057

$225,000C-

4 bd · 4.0 ba · 1,314 sqft · Built 1930 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,339/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$439
• HOA: −$0
• Vac / Maint / Mgmt: −$491
• Net cashflow: $229/mo
• Annual: $2,745/yr
• Cap rate: 7.51%
• Cash-on-cash: 4.36%
• DSCR: 1.19
• 1% rule: 1.04%
• Cash to close: $63,000

Investor read

• This is a 4-bed/4.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $229 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $225k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 83/100 on livability (#28 in MN, #872 nationally) — a professional / high-income tenant draw. Strengths: schools A+, amenities A+, housing A+; Watch: commute F.
• Northfield Public School District (town): math 57% / reading 63% proficiency, ranked #35 of 301 in MN (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 147 active listings in the ZIP; solid renter incomes; 93 units permitted in Rice County in 2024 (0 in 5+ unit buildings).
• 4 sale attempts since 11y 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 $130k; list at $225k implies a 73% gain — meaningful room to come down on a strong offer.
• Cap rate 7.5% vs local median 2.6% in Northfield — 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.
• This rent runs 30% of the median local income ($93k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1930 — 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 A-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 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.