710 6th St SW

Wells, MN 56097

$145,000D+

3 bd · 1.0 ba · 1,296 sqft · Built 1959 · Other · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,161/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$242
• HOA: −$0
• Vac / Maint / Mgmt: −$244
• Net cashflow: $-85/mo
• Annual: $-1,022/yr
• Cap rate: 5.59%
• Cash-on-cash: -2.52%
• DSCR: 0.89
• 1% rule: 0.80%
• Cash to close: $40,600

Investor read

• This is a 3-bed/1.0-bath other listed at $145k.
• At list price, monthly cash flow is $-85 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $133k (8.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $116k (20.0% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $116k (20.0% below list) — sets the bar for 1% rule.
• In year one you build about $16k of equity ($1k loan paydown + $14k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#149 in MN, #3,328 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, crime A; Watch: amenities D, employment D, commute F.
• United South Central School District (rural): math 46% / reading 53% proficiency, ranked #130 of 301 in MN (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: United South Central Elementary (math 57% / reading 59%, grade C+, #258 of 857 statewide, top 30%, 445 students, 55% FRL); United South Central High School (math 32% / reading 47%, grade F, #246 of 471 statewide, top 59%, 333 students, 51% FRL) — zoned schools average 53% FRL vs 35% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 28 active listings in the ZIP; 4 units permitted in Faribault County in 2024 (0 in 5+ unit buildings).
• Faribault County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 17y 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.
• By year 3, paydown + projected appreciation supports a ~$39k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.6% vs local median 4.0% in Wells — 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 1959 — 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.
• 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.