306 4th Ave S

Princeton, MN 55371

$224,900D

4 bd · 2.0 ba · 1,172 sqft · Built 1912 · SingleFamily · Active · 43 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,971/mo
• Mortgage (P&I): −$1,179
• Tax + insurance: −$511
• HOA: −$0
• Vac / Maint / Mgmt: −$414
• Net cashflow: $-133/mo
• Annual: $-1,597/yr
• Cap rate: 5.58%
• Cash-on-cash: -2.54%
• DSCR: 0.89
• 1% rule: 0.88%
• Cash to close: $62,972

Investor read

• This is a 4-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $-133 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $201k (10.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $197k (12.4% below list).
• It's been on market 43 days — a 3% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $197k (12.4% 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 68/100 on livability (#404 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, crime A-; Watch: health & safety D+, employment D, amenities F.
• Princeton Public School District (town): math 41% / reading 53% proficiency, ranked #141 of 301 in MN (top 47%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1912 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 116 active listings in the ZIP; solid renter incomes; 163 units permitted in Mille Lacs County in 2024 (66 in 5+ unit buildings).
• Mille Lacs County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 8y ago; this cycle's ask has dropped $35k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $160k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.6% vs local median 3.4% in Princeton — 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 43 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1912 — 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.