2857 405th Ave NE

Stanchfield, MN 55006

$99,000B+

1 bd · 1.0 ba · 1,044 sqft · Built 1970 · Other · Active · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,329/mo
• Mortgage (P&I): −$519
• Tax + insurance: −$163
• HOA: −$0
• Vac / Maint / Mgmt: −$279
• Net cashflow: $368/mo
• Annual: $4,410/yr
• Cap rate: 11.55%
• Cash-on-cash: 18.79%
• DSCR: 1.84
• 1% rule: 1.34%
• Cash to close: $27,720

Investor read

• This is a 1-bed/1.0-bath other listed at $99k.
• At list price, monthly cash flow is $368 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $99k).
• It's been on market 65 days — a 6% lower offer ($93k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $93k (6.0% below list) — sets the bar for market timing.
• In year one you build about $11k of equity ($684 loan paydown + $10k appreciation (10.0% local appreciation)).
• Location reads 47/100 on livability (#891 in MN) — a working-class tenant base; expect higher turnover. Strengths: crime A, cost of living A; Watch: schools D+, amenities F, commute F.
• Braham Public School District (rural): math 39% / reading 52% proficiency, ranked #170 of 301 in MN (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 34 active listings in the ZIP; 191 units permitted in Isanti County in 2024 (28 in 5+ unit buildings).
• Isanti County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $22k; list at $99k implies a 360% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $28k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 65 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1970 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.