4360 Empress Dr N #5

Hugo, MN 55038

$289,900D

3 bd · 2.5 ba · 1,716 sqft · Built 2006 · SingleFamily · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,857/mo
• Mortgage (P&I): −$1,520
• Tax + insurance: −$374
• HOA: −$379
• Vac / Maint / Mgmt: −$600
• Net cashflow: $-16/mo
• Annual: $-188/yr
• Cap rate: 6.23%
• Cash-on-cash: -0.23%
• DSCR: 0.99
• 1% rule: 0.99%
• Cash to close: $81,172

Investor read

• This is a 3-bed/2.5-bath single-family listed at $290k.
• At list price, monthly cash flow is $-16 ($-188/yr) — negative.
• To cash-flow at today's rent, offer at most $287k (1.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $286k (1.4% below list).
• It's been on market 30 days — a 2% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $286k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#314 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A-; Watch: amenities F, commute F, health & safety F.
• White Bear Lake School District (suburban): math 45% / reading 57% proficiency, ranked #83 of 301 in MN (top 28%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Matoska International (math 45% / reading 54%, grade D, #423 of 857 statewide, top 55%, 554 students, 24% FRL); Central Middle (math 41% / reading 55%, grade C-, #90 of 258 statewide, top 35%, 1,020 students, 24% FRL); White Bear South Campus Senior (math 37%, 1,111 students, 26% FRL) — zoned schools at 25% FRL track the district average.
• Market conditions: 278 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 1,405 units permitted in Washington County in 2024 (121 in 5+ unit buildings).
• Washington County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 20y 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 $191k; list at $290k implies a 52% gain — meaningful room to come down on a strong offer.
• Cap rate 6.2% vs local median 3.1% in Hugo — 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.