221 1st St

Stephen, MN 56757

$137,000C

3 bd · 2.0 ba · 1,232 sqft · Built 1965 · SingleFamily · Active · 84 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,194/mo
• Mortgage (P&I): −$718
• Tax + insurance: −$136
• HOA: −$0
• Vac / Maint / Mgmt: −$251
• Net cashflow: $88/mo
• Annual: $1,059/yr
• Cap rate: 7.07%
• Cash-on-cash: 2.76%
• DSCR: 1.12
• 1% rule: 0.87%
• Cash to close: $38,360

Investor read

• This is a 3-bed/2.0-bath single-family listed at $137k.
• At list price, monthly cash flow is $88 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $119k (12.9% below list).
• It's been on market 84 days — a 6% lower offer ($129k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $119k (12.9% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($947 loan paydown + $4k appreciation (3.0% local appreciation)).
• Location reads 74/100 on livability (#223 in MN, #4,796 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime C-, schools D+, amenities F.
• Stephen-Argyle Central Schools (rural): math 55% / reading 60% proficiency, ranked #170 of 467 in MN (top 36%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 3 active listings in the ZIP; 9 units permitted in Marshall County in 2024 (0 in 5+ unit buildings).
• Marshall County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $38k cash investment doubles in ~6 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 84 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1965 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.