27167 County Highway 32

Richwood, MN 56501

$276,000C+

2 bd · 1.0 ba · 1,100 sqft · Built 1971 · SingleFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,132/mo
• Mortgage (P&I): −$1,447
• Tax + insurance: −$220
• HOA: −$0
• Vac / Maint / Mgmt: −$658
• Net cashflow: $806/mo
• Annual: $9,678/yr
• Cap rate: 9.80%
• Cash-on-cash: 12.52%
• DSCR: 1.56
• 1% rule: 1.13%
• Cash to close: $77,280

Investor read

• This is a 2-bed/1.0-bath single-family listed at $276k.
• At list price, monthly cash flow is $806 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $276k).
• It's been on market 23 days — a 2% lower offer ($272k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $272k (1.5% 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 $8k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Detroit Lakes Public School District (town): math 44% / reading 50% proficiency, ranked #155 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 301 active listings in the ZIP; 156 units permitted in Becker County in 2024 (0 in 5+ unit buildings).
• Becker County population projected at +4% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $165k; list at $276k implies a 67% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $77k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• Built in 1971 — 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.