16424 Elm Creek Ln #4029

Lakeville, MN 55044

$284,900D-

3 bd · 2.0 ba · 1,424 sqft · Built 2007 · Townhouse · Pending · 85 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,411/mo
• Mortgage (P&I): −$1,494
• Tax + insurance: −$219
• HOA: −$350
• Vac / Maint / Mgmt: −$506
• Net cashflow: $-158/mo
• Annual: $-1,899/yr
• Cap rate: 5.63%
• Cash-on-cash: -2.38%
• DSCR: 0.89
• 1% rule: 0.85%
• Cash to close: $79,772

Investor read

• This is a 3-bed/2.0-bath townhouse listed at $285k.
• At list price, monthly cash flow is $-158 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $257k (9.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $241k (15.4% below list).
• It's been on market 85 days — a 6% lower offer ($268k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $241k (15.4% below list) — sets the bar for 1% rule.
• 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 84/100 on livability (#25 in MN, #711 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: amenities D+, commute F, cost of living F.
• Rosemount-Apple Valley-Eagan (suburban): math 50% / reading 58% proficiency, ranked #58 of 301 in MN (top 19%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: Parkview Elementary (math 46% / reading 43%, grade F, #534 of 857 statewide, top 66%, 694 students, 42% FRL); Scott Highlands Middle (math 40% / reading 62%, grade C, #69 of 258 statewide, top 27%, 1,184 students, 28% FRL); Rosemount Senior High (math 54% / reading 67%, grade C+, #43 of 471 statewide, top 9%, 2,425 students, 21% FRL).
• Market conditions: Rents rising (+3.4%/yr); 719 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts 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 $174k; list at $285k implies a 64% gain — meaningful room to come down on a strong offer.
• Cap rate 5.6% vs local median 3.2% in Lakeville — 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?
• It's been on market 85 days. Have you received any prior offers? Is the seller open to a 15% 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?
• 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 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.