200 S Freeman Ave #206

Luverne, MN 56156

$67,000C-

1 bd · 1.0 ba · 632 sqft · Built 1983 · Condo · Active · 296 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $919/mo
• Mortgage (P&I): −$351
• Tax + insurance: −$69
• HOA: −$265
• Vac / Maint / Mgmt: −$193
• Net cashflow: $40/mo
• Annual: $485/yr
• Cap rate: 7.02%
• Cash-on-cash: 2.59%
• DSCR: 1.12
• 1% rule: 1.37%
• Cash to close: $18,760

Investor read

• This is a 1-bed/1.0-bath condo listed at $67k.
• At list price, monthly cash flow is $40 ($485/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($919 rent vs $67k).
• It's been on market 296 days — a 12% lower offer ($59k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $59k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $463 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 86/100 on livability (#14 in MN, #455 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, cost of living A+, housing A+; Watch: commute F.
• Luverne Public School District (rural): math 55% / reading 58% proficiency, ranked #64 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: HOA is 29% of rent.
• Market conditions: 65 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 66 units permitted in Rock County in 2024 (50 in 5+ unit buildings).
• Rock County population projected to shrink 9% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 7 sale attempts since 16y 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 $47k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.0% vs local median 3.4% in Luverne — 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 296 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 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?
• 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.