5 8th St NW

Buffalo, MN 55313

$65,000B

1 bd · 1.0 ba · 452 sqft · Built 1910 · SingleFamily · Active · 35 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,110/mo
• Mortgage (P&I): −$341
• Tax + insurance: −$136
• HOA: −$0
• Vac / Maint / Mgmt: −$233
• Net cashflow: $400/mo
• Annual: $4,799/yr
• Cap rate: 13.68%
• Cash-on-cash: 26.37%
• DSCR: 2.17
• 1% rule: 1.71%
• Cash to close: $18,200

Investor read

• This is a 1-bed/1.0-bath single-family listed at $65k.
• At list price, monthly cash flow is $400 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $65k).
• It's been on market 35 days — a 3% lower offer ($63k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $63k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $449 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#94 in MN, #2,114 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Buffalo-Hanover-Montrose Public Schools (town): math 52% / reading 56% proficiency, ranked #63 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 18% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 169 active listings in the ZIP; solid renter incomes; 1,260 units permitted in Wright County in 2024 (180 in 5+ unit buildings).
• Wright County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 10 sale attempts since 29y ago; this cycle's ask has dropped $10k (13%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $18k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 13.7% vs local median 2.8% in Buffalo — 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 14% of the median local income ($92k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• It's been on market 35 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1910 — 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 A-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.