1006 87th Ave W Uppr Unit

Duluth, MN 55808

$119,900C-

2 bd · 1.0 ba · 1,002 sqft · Built 1913 · Condo · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,145/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$137
• HOA: −$0
• Vac / Maint / Mgmt: −$240
• Net cashflow: $138/mo
• Annual: $1,659/yr
• Cap rate: 7.68%
• Cash-on-cash: 4.94%
• DSCR: 1.22
• 1% rule: 0.95%
• Cash to close: $33,572

Investor read

• This is a 2-bed/1.0-bath condo listed at $120k.
• At list price, monthly cash flow is $138 ($2k/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 $114k (4.5% below list).
• It's been on market 23 days — a 2% lower offer ($118k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $114k (4.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $829 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#36 in MN, #1,060 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Duluth Public School District (urban): math 44% / reading 55% proficiency, ranked #132 of 301 in MN (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1913 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 35 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 10 sale attempts since 14y 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.
• Current owner paid $36k; list at $120k implies a 238% gain — meaningful room to come down on a strong offer.
• Cap rate 7.7% vs local median 4.9% in Duluth — 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

• Built in 1913 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.