16 10th St NE

Rochester, MN 55906

$175,000C-

2 bd · 2.0 ba · 756 sqft · Built 1900 · SingleFamily · Active · 160 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,557/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$258
• HOA: −$0
• Vac / Maint / Mgmt: −$327
• Net cashflow: $54/mo
• Annual: $651/yr
• Cap rate: 6.67%
• Cash-on-cash: 1.33%
• DSCR: 1.06
• 1% rule: 0.89%
• Cash to close: $49,000

Investor read

• This is a 2-bed/2.0-bath single-family listed at $175k.
• At list price, monthly cash flow is $54 ($651/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 $156k (11.0% below list).
• It's been on market 160 days — a 12% lower offer ($154k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $154k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 92/100 on livability (#1 in MN, #27 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+.
• Rochester Public School District (urban): math 40% / reading 51% proficiency, ranked #152 of 301 in MN (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+9.2%/yr); 218 active listings in the ZIP; 31 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,267 units permitted in Olmsted County in 2024 (915 in 5+ unit buildings).
• Olmsted County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $36k; list at $175k implies a 379% gain — meaningful room to come down on a strong offer.
• Cap rate 6.7% vs local median 3.5% in Rochester — 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

• It's been on market 160 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1900 — 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 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?
• 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.