4400 Upton Ave S #405

Minneapolis, MN 55410

$194,900D

1 bd · 1.0 ba · 770 sqft · Built 1964 · Condo · Pending · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,981/mo
• Mortgage (P&I): −$1,022
• Tax + insurance: −$299
• HOA: −$530
• Vac / Maint / Mgmt: −$416
• Net cashflow: $-286/mo
• Annual: $-3,431/yr
• Cap rate: 4.53%
• Cash-on-cash: -6.29%
• DSCR: 0.72
• 1% rule: 1.02%
• Cash to close: $54,572

Investor read

• This is a 1-bed/1.0-bath condo listed at $195k.
• At list price, monthly cash flow is $-286 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (25.9% below list).
• Meets the 1% rule at list price ($2k rent vs $195k).
• It's been on market 65 days — a 6% lower offer ($183k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $144k (25.9% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 27% of rent.
• Market conditions: Rents rising (+2.9%/yr); 158 active listings in the ZIP; 25 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 20y 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 4.5% vs local median 3.1% in Minneapolis — 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.
• This rent is only 16% of the median local income ($146k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 65 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1964 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?