815 6th Ave NE

Perham, MN 56573

$239,900C-

4 bd · 2.0 ba · 3,380 sqft · Built 1997 · SingleFamily · Active · 105 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,341/mo
• Mortgage (P&I): −$1,258
• Tax + insurance: −$283
• HOA: −$0
• Vac / Maint / Mgmt: −$492
• Net cashflow: $308/mo
• Annual: $3,694/yr
• Cap rate: 7.83%
• Cash-on-cash: 5.50%
• DSCR: 1.24
• 1% rule: 0.98%
• Cash to close: $67,172

Investor read

• This is a 4-bed/2.0-bath single-family listed at $240k.
• At list price, monthly cash flow is $308 ($4k/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 $234k (2.4% below list).
• It's been on market 105 days — a 9% lower offer ($218k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $218k (9.0% below list) — sets the bar for market timing.
• 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 70/100 on livability (#328 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Perham-Dent Public School District (town): math 45% / reading 57% proficiency, ranked #110 of 301 in MN (top 36%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Heart of The Lake Elementary (math 54% / reading 51%, grade C-, #364 of 857 statewide, top 43%, 575 students, 47% FRL); Prairie Wind Middle (math 44% / reading 59%, grade C, #65 of 258 statewide, top 26%, 515 students, 38% FRL); Perham Senior High (math 37% / reading 62%, grade D, #143 of 471 statewide, top 33%, 505 students, 36% FRL).
• Market conditions: 93 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 4 sale attempts since 2y 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 $200k; 20% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.8% vs local median 6.0% in Perham — 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

• It's been on market 105 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• 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.