1920 S 1st St #1302

Minneapolis, MN 55454

$85,000D

2 bd · 2.0 ba · 1,032 sqft · Built 1973 · Condo · Pending · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,955/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$157
• HOA: −$1,116
• Vac / Maint / Mgmt: −$411
• Net cashflow: $-174/mo
• Annual: $-2,091/yr
• Cap rate: 3.83%
• Cash-on-cash: -8.78%
• DSCR: 0.61
• 1% rule: 2.30%
• Cash to close: $23,800

Investor read

• This is a 2-bed/2.0-bath condo listed at $85k.
• At list price, monthly cash flow is $-174 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $54k (36.2% below list).
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 46 days — a 3% lower offer ($82k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $54k (36.2% below list) — sets the bar for cash-flow.
• In year one you build about $2k of equity ($588 loan paydown + $1k appreciation (1.3% local appreciation)).
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 57% of rent.
• Market conditions: 9 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); lower-income renter base — watch delinquency; 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.
• 4 sale attempts since 34y 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 $36k; list at $85k implies a 136% gain — meaningful room to come down on a strong offer.
• Cap rate 3.8% vs local median 3.1% in Minneapolis — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• At $1,955/mo this rent would consume 102% of the median local household income ($23k/yr) (locally 800% 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?
• It's been on market 46 days. Have you received any prior offers? Is the seller open to a 36% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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?