305 Harding St S

Karlstad, MN 56732

$87,000B-

3 bd · 1.0 ba · 799 sqft · Built 1930 · SingleFamily · Active · 63 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $896/mo
• Mortgage (P&I): −$456
• Tax + insurance: −$92
• HOA: −$0
• Vac / Maint / Mgmt: −$188
• Net cashflow: $160/mo
• Annual: $1,916/yr
• Cap rate: 8.50%
• Cash-on-cash: 7.87%
• DSCR: 1.35
• 1% rule: 1.03%
• Cash to close: $24,360

Investor read

• This is a 3-bed/1.0-bath single-family listed at $87k.
• At list price, monthly cash flow is $160 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($896 rent vs $87k).
• It's been on market 63 days — a 6% lower offer ($82k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $82k (6.0% below list) — sets the bar for market timing.
• In year one you build about $6k of equity ($601 loan paydown + $6k appreciation (6.5% local appreciation)).
• Location reads 76/100 on livability (#154 in MN, #3,401 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D+, amenities F, commute F.
• Tri-County School District (rural): math 60% / reading 65% proficiency, ranked #130 of 467 in MN (top 28%) — 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: 7 active listings in the ZIP; 4 units permitted in Kittson County in 2024 (0 in 5+ unit buildings).
• Kittson County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• At projected returns (6.5% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 63 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1930 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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.