701 1st St NE

New Prague, MN 56071

$349,900D-

5 bd · 3.0 ba · 2,764 sqft · Built 1956 · SingleFamily · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,495/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$654
• HOA: −$0
• Vac / Maint / Mgmt: −$524
• Net cashflow: $-517/mo
• Annual: $-6,210/yr
• Cap rate: 4.52%
• Cash-on-cash: -6.34%
• DSCR: 0.72
• 1% rule: 0.71%
• Cash to close: $97,972

Investor read

• This is a 5-bed/3.0-bath single-family listed at $350k.
• At list price, monthly cash flow is $-517 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $258k (26.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $250k (28.7% below list).
• It's been on market 61 days — a 6% lower offer ($329k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $250k (28.7% 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 $10k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#86 in MN, #1,971 nationally) — a professional / high-income tenant draw. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F.
• New Prague Area Schools (town): math 57% / reading 60% proficiency, ranked #36 of 301 in MN (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 10% free/reduced lunch — higher-income household profile.
• Zoned schools: Falcon Ridge (math 61% / reading 59%, grade B-, #209 of 857 statewide, top 25%, 554 students, 21% FRL); New Prague Middle School (math 54% / reading 59%, grade B, #38 of 258 statewide, top 15%, 937 students, 19% FRL); New Prague Senior High (math 55% / reading 68%, grade B-, #39 of 471 statewide, top 9%, 1,343 students, 16% FRL).
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 95 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 699 units permitted in Scott County in 2024 (84 in 5+ unit buildings).
• Scott County population projected at +31% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 34y ago; this cycle's ask has dropped $44k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $221k; list at $350k implies a 58% gain — meaningful room to come down on a strong offer.
• Cap rate 4.5% vs local median 3.1% in New Prague — 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 61 days. Have you received any prior offers? Is the seller open to a 29% concession, seller financing, or rate buy-down credit?
• Built in 1956 — 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?
• 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.