9280 53rd St N

Lake Elmo, MN 55042

$639,900F

2 bd · 3.0 ba · 3,656 sqft · Built 1991 · SingleFamily · Pending · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,330/mo
• Mortgage (P&I): −$3,356
• Tax + insurance: −$840
• HOA: −$0
• Vac / Maint / Mgmt: −$489
• Net cashflow: $-2,355/mo
• Annual: $-28,258/yr
• Cap rate: 1.88%
• Cash-on-cash: -15.77%
• DSCR: 0.30
• 1% rule: 0.36%
• Cash to close: $179,172

Investor read

• This is a 2-bed/3.0-bath single-family listed at $640k.
• At list price, monthly cash flow is $-2k ($-28k/yr) — negative.
• To cash-flow at today's rent, offer at most $224k (65.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $233k (63.6% below list).
• It's been on market 21 days — a 2% lower offer ($630k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $224k (65.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#271 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+, employment A+; Watch: amenities F, cost of living F, health & safety F.
• Stillwater Area Public School District (suburban): math 53% / reading 56% proficiency, ranked #54 of 301 in MN (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 12% free/reduced lunch — higher-income household profile.
• Market conditions: 134 active listings in the ZIP; 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.
• Cap rate 1.9% vs local median 2.6% in Lake Elmo — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• This sits on a lake — are riparian / water-frontage rights deeded with the parcel? Any dock permits, shoreline easements, or HOA water-use restrictions?
• What's the documented flood / surge / shoreline-erosion history here (FEMA AND non-FEMA — e.g., storm surge, creek backup, septic-field saturation)?
• Any water-quality or seasonal algae-bloom issues that affect tenant satisfaction or short-term-rental demand?
• 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.