7385 University Ave NE

Fridley, MN 55432

$449,900D

5 bd · 2.0 ba · 1,664 sqft · Built 1964 · MultiFamily · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,734/mo
• Mortgage (P&I): −$2,359
• Tax + insurance: −$669
• HOA: −$0
• Vac / Maint / Mgmt: −$784
• Net cashflow: $-79/mo
• Annual: $-943/yr
• Cap rate: 6.08%
• Cash-on-cash: -0.75%
• DSCR: 0.97
• 1% rule: 0.83%
• Cash to close: $125,972

Investor read

• This is a 2 × 4-bed/1.5-bath units multifamily listed at $450k.
• At list price, monthly cash flow is $-79 ($-943/yr) — negative. Per door: $-39/mo.
• To cash-flow at today's rent, offer at most $436k (3.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $373k (17.0% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $373k (17.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#185 in MN, #3,977 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, employment B+; Watch: crime C-, amenities F, health & safety F.
• Spring Lake Park Public Schools (suburban): math 41% / reading 49% proficiency, ranked #162 of 301 in MN (top 54%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+5.8%/yr); 100 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 1,083 units permitted in Anoka County in 2024 (134 in 5+ unit buildings).
• Anoka County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 10 sale attempts since 29y ago; this cycle's ask is 23641% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $50k; list at $450k implies a 791% gain — meaningful room to come down on a strong offer.
• Cap rate 6.1% vs local median 3.1% in Fridley — 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 $3,734/mo this rent would consume 56% of the median local household income ($80k/yr) (locally 954% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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 1964 — 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.
• 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.