106 Selmser Ave

Cloquet, MN 55720

$150,000C-

3 bd · 1.0 ba · 960 sqft · Built 1925 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,353/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$237
• HOA: −$0
• Vac / Maint / Mgmt: −$284
• Net cashflow: $45/mo
• Annual: $541/yr
• Cap rate: 6.65%
• Cash-on-cash: 1.29%
• DSCR: 1.06
• 1% rule: 0.90%
• Cash to close: $42,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $45 ($541/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 $135k (9.8% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $135k (9.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#413 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: employment D+, health & safety D, amenities F.
• Cloquet Public School District (town): math 41% / reading 56% proficiency, ranked #140 of 301 in MN (top 46%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Washington Elementary (math 47% / reading 52%, grade D, #423 of 857 statewide, top 55%, 500 students, 50% FRL); Cloquet Middle (math 35% / reading 57%, grade D+, #103 of 258 statewide, top 40%, 780 students, 50% FRL); Cloquet Senior (math 42% / reading 57%, grade D, #143 of 471 statewide, top 33%, 800 students, 43% FRL).
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 87 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 126 units permitted in Carlton County in 2024 (22 in 5+ unit buildings).
• Carlton County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 11 sale attempts since 21y 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 $110k; 36% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 6.7% vs local median 3.1% in Cloquet — 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 1925 — 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.
• 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.