403 Lake St

Alexandria, MN 56308

$199,900D

3 bd · 2.0 ba · 929 sqft · Built 1902 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,360/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$229
• HOA: −$0
• Vac / Maint / Mgmt: −$286
• Net cashflow: $-203/mo
• Annual: $-2,433/yr
• Cap rate: 5.08%
• Cash-on-cash: -4.35%
• DSCR: 0.81
• 1% rule: 0.68%
• Cash to close: $55,972

Investor read

• This is a 3-bed/2.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-203 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $164k (17.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $136k (31.9% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $136k (31.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#105 in MN, #2,409 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities D, commute F.
• Alexandria Public School District (town): math 55% / reading 57% proficiency, ranked #64 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1902 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 402 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 285 units permitted in Douglas County in 2024 (88 in 5+ unit buildings).
• Douglas County population projected at +5% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 15y 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.
• Cap rate 5.1% vs local median 2.5% in Alexandria — 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

• 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 1902 — 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.