145 Milwaukee Ave SW

Hutchinson, MN 55350

$239,900F

6 bd · 3.0 ba · 918 sqft · Built 1890 · Other · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,565/mo
• Mortgage (P&I): −$1,258
• Tax + insurance: −$262
• HOA: −$0
• Vac / Maint / Mgmt: −$329
• Net cashflow: $-284/mo
• Annual: $-3,410/yr
• Cap rate: 4.87%
• Cash-on-cash: -5.08%
• DSCR: 0.77
• 1% rule: 0.65%
• Cash to close: $67,172

Investor read

• This is a 6-bed/3.0-bath other listed at $240k.
• At list price, monthly cash flow is $-284 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $190k (20.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $156k (34.8% below list).
• It's been on market 34 days — a 3% lower offer ($233k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $156k (34.8% 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 $7k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#72 in MN, #1,744 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Hutchinson Public School District (town): math 56% / reading 56% proficiency, ranked #62 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1890 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 105 active listings in the ZIP; 57 units permitted in McLeod County in 2024 (0 in 5+ unit buildings).
• McLeod County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 10 sale attempts since 34y 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.
• Cap rate 4.9% vs local median 3.1% in Hutchinson — 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 34 days. Have you received any prior offers? Is the seller open to a 35% concession, seller financing, or rate buy-down credit?
• Built in 1890 — 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?
• 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.