108 2nd St E

Ada, MN 56510

$120,000C+

3 bd · 1.0 ba · 2,296 sqft · Built 1934 · SingleFamily · Pending · 182 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,190/mo
• Mortgage (P&I): −$629
• Tax + insurance: −$118
• HOA: −$0
• Vac / Maint / Mgmt: −$250
• Net cashflow: $193/mo
• Annual: $2,312/yr
• Cap rate: 8.22%
• Cash-on-cash: 6.88%
• DSCR: 1.31
• 1% rule: 0.99%
• Cash to close: $33,600

Investor read

• This is a 3-bed/1.0-bath single-family listed at $120k.
• At list price, monthly cash flow is $193 ($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 $119k (0.8% below list).
• It's been on market 182 days — a 12% lower offer ($106k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $106k (12.0% below list) — sets the bar for market timing.
• In year one you build about $8k of equity ($830 loan paydown + $7k appreciation (6.2% local appreciation)).
• Location reads 77/100 on livability (#137 in MN, #3,026 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D, amenities F, commute F.
• Watch-outs: built in 1934 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 13 active listings in the ZIP; 8 units permitted in Norman County in 2024 (0 in 5+ unit buildings).
• 5 sale attempts since 11y ago; this cycle's ask has dropped $29k (19%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $90k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (6.2% appreciation + 3.0% rent growth), your $34k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 182 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1934 — 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 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.