2022 Morgan Way

North Mankato, MN 56003

$164,900B+

3 bd · 1.0 ba · 1,568 sqft · Built 2019 · Other · Active · 112 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,005/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$198
• HOA: −$0
• Vac / Maint / Mgmt: −$421
• Net cashflow: $522/mo
• Annual: $6,263/yr
• Cap rate: 10.09%
• Cash-on-cash: 13.56%
• DSCR: 1.60
• 1% rule: 1.22%
• Cash to close: $46,172

Investor read

• This is a 3-bed/1.0-bath other listed at $165k. Condition is rated good.
• At list price, monthly cash flow is $522 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $165k).
• It's been on market 112 days — a 9% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#71 in MN, #1,734 nationally) — a professional / high-income tenant draw. Strengths: schools A+, housing A+, crime A; Watch: amenities F, commute F.
• Mankato Public School District (urban): math 48% / reading 56% proficiency, ranked #98 of 301 in MN (top 33%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 168 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 109 units permitted in Nicollet County in 2024 (47 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $46k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 10.1% vs local median 3.3% in North Mankato — 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

• It's been on market 112 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• 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 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.