405 Hoff Ave

Vining, MN 56588

$89,000C

2 bd · 1.0 ba · 580 sqft · Built 1930 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $802/mo
• Mortgage (P&I): −$467
• Tax + insurance: −$81
• HOA: −$0
• Vac / Maint / Mgmt: −$168
• Net cashflow: $86/mo
• Annual: $1,037/yr
• Cap rate: 7.46%
• Cash-on-cash: 4.16%
• DSCR: 1.19
• 1% rule: 0.90%
• Cash to close: $24,920

Investor read

• This is a 2-bed/1.0-bath single-family listed at $89k.
• At list price, monthly cash flow is $86 ($1k/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 $80k (9.9% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $80k (9.9% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($615 loan paydown + $9k appreciation (10.0% local appreciation)).
• Location reads 63/100 on livability (#630 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: health & safety C-, employment D+, crime D.
• Henning Public School District (rural): math 60% / reading 65% proficiency, ranked #128 of 467 in MN (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 2 sale attempts since 11y 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 $33k; list at $89k implies a 172% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1930 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D 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?
• 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.