407 Holden Ave

Henning, MN 56551

$129,900D-

1 bd · 1.0 ba · 908 sqft · Built 1940 · SingleFamily · Pending · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $863/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$140
• HOA: −$0
• Vac / Maint / Mgmt: −$181
• Net cashflow: $-139/mo
• Annual: $-1,673/yr
• Cap rate: 5.01%
• Cash-on-cash: -4.60%
• DSCR: 0.80
• 1% rule: 0.66%
• Cash to close: $36,372

Investor read

• This is a 1-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $-139 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $105k (19.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (33.5% below list).
• It's been on market 15 days — a 2% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $86k (33.5% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($898 loan paydown + $5k appreciation (3.7% local appreciation)).
• Location reads 72/100 on livability (#262 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: health & safety C-, employment D+, amenities F.
• Henning Public School District (rural): math 60% / reading 65% proficiency, ranked #128 of 467 in MN (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Henning Elementary (math 57% / reading 52%, grade C, #320 of 857 statewide, top 41%, 224 students, 54% FRL); Henning Secondary (math 42% / reading 62%, grade D+, #111 of 471 statewide, top 26%, 158 students, 44% FRL) — zoned schools average 49% FRL vs 29% district-wide (20 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 29 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 2 sale attempts since 23y 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 $66k; list at $130k implies a 97% gain — meaningful room to come down on a strong offer.
• By year 6, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• Built in 1940 — 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 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?
• 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.
• 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.