404 6th Ave W

Lamberton, MN 56152

$89,500C

4 bd · 2.0 ba · 880 sqft · Built 1910 · SingleFamily · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $892/mo
• Mortgage (P&I): −$469
• Tax + insurance: −$129
• HOA: −$0
• Vac / Maint / Mgmt: −$187
• Net cashflow: $106/mo
• Annual: $1,271/yr
• Cap rate: 7.71%
• Cash-on-cash: 5.07%
• DSCR: 1.23
• 1% rule: 1.00%
• Cash to close: $25,060

Investor read

• This is a 4-bed/2.0-bath single-family listed at $90k.
• At list price, monthly cash flow is $106 ($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 $89k (0.4% below list).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $89k (0.4% below list) — sets the bar for 1% rule.
• In year one you build about $3k of equity ($619 loan paydown + $3k appreciation (3.0% local appreciation)).
• Location reads 77/100 on livability (#126 in MN, #2,882 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Red Rock Central School District (rural): math 63% / reading 69% proficiency, ranked #86 of 467 in MN (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 3 active listings in the ZIP; 25 units permitted in Redwood County in 2024 (0 in 5+ unit buildings).
• Redwood County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 3y 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 $68k; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $25k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 10, paydown + projected appreciation supports a ~$32k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• 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 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.