3645 Lyric Ave

Orono, MN 55391

$325,000C

3 bd · 2.0 ba · 1,695 sqft · Built 1989 · SingleFamily · Pending · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,907/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$353
• HOA: −$0
• Vac / Maint / Mgmt: −$610
• Net cashflow: $238/mo
• Annual: $2,862/yr
• Cap rate: 7.17%
• Cash-on-cash: 3.14%
• DSCR: 1.14
• 1% rule: 0.89%
• Cash to close: $91,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $325k.
• At list price, monthly cash flow is $238 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $291k (10.6% below list).
• It's been on market 41 days — a 3% lower offer ($315k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $291k (10.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#457 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, cost of living F, health & safety F.
• Westonka Public School District (rural): math 65% / reading 68% proficiency, ranked #14 of 301 in MN (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Market conditions: 204 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 32y ago; this cycle's ask has dropped $50k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $164k; list at $325k implies a 98% gain — meaningful room to come down on a strong offer.
• Cap rate 7.2% vs local median 0.4% in Orono — 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.

Questions for listing agent

• It's been on market 41 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• 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.