302 W 5th Ave

Lakefield, MN 56150

$134,500C

3 bd · 1.0 ba · 2,309 sqft · Built 1916 · SingleFamily · Pending · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,294/mo
• Mortgage (P&I): −$705
• Tax + insurance: −$143
• HOA: −$0
• Vac / Maint / Mgmt: −$272
• Net cashflow: $173/mo
• Annual: $2,081/yr
• Cap rate: 7.84%
• Cash-on-cash: 5.53%
• DSCR: 1.25
• 1% rule: 0.96%
• Cash to close: $37,660

Investor read

• This is a 3-bed/1.0-bath single-family listed at $134k.
• At list price, monthly cash flow is $173 ($2k/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 $129k (3.8% below list).
• It's been on market 32 days — a 3% lower offer ($130k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $129k (3.8% below list) — sets the bar for 1% rule.
• In year one you build about $1k of equity ($930 loan paydown + $330 appreciation (0.2% local appreciation)).
• Location reads 76/100 on livability (#159 in MN, #3,445 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Jackson County Central School District (town): math 46% / reading 48% proficiency, ranked #160 of 301 in MN (top 53%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Pleasantview Elementary (math 57% / reading 57%, grade C+, #265 of 857 statewide, top 35%, 156 students, 45% FRL); Jackson County Central Middle (math 39% / reading 40%, grade F, #150 of 258 statewide, top 59%, 241 students, 44% FRL); Jackson County Central Senior High (math 24% / reading 47%, grade F, #303 of 471 statewide, top 65%, 340 students, 38% FRL) — zoned schools average 42% FRL vs 27% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1916 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 4 units permitted in Jackson County in 2024 (0 in 5+ unit buildings).
• Jackson County population projected at -11% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 5y 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 $93k; 45% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (0.2% appreciation + 3.0% rent growth), your $38k cash investment doubles in ~8 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 32 days. Have you received any prior offers? Is the seller open to a 4% concession, seller financing, or rate buy-down credit?
• Built in 1916 — 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.
• Schools are B-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?
• 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.