402 E Walnut St

Redwood Falls, MN 56283

$147,500D+

2 bd · 2.0 ba · 1,007 sqft · Built 1946 · SingleFamily · Active · 109 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,403/mo
• Mortgage (P&I): −$774
• Tax + insurance: −$184
• HOA: −$0
• Vac / Maint / Mgmt: −$295
• Net cashflow: $151/mo
• Annual: $1,814/yr
• Cap rate: 7.52%
• Cash-on-cash: 4.39%
• DSCR: 1.20
• 1% rule: 0.95%
• Cash to close: $41,300

Investor read

• This is a 2-bed/2.0-bath single-family listed at $148k.
• At list price, monthly cash flow is $151 ($2k/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 $140k (4.9% below list).
• It's been on market 109 days — a 9% lower offer ($134k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $134k (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 $4k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#169 in MN, #3,642 nationally) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: amenities F, commute F.
• Redwood Area School District (town): math 39% / reading 46% proficiency, ranked #207 of 301 in MN (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Reede Gray Elementary (math 57% / reading 42%, grade D, #423 of 857 statewide, top 55%, 419 students, 52% FRL); Redwood Valley Middle (math 34% / reading 46%, grade F, #147 of 258 statewide, top 57%, 322 students, 55% FRL); Redwood Valley Senior High (math 27% / reading 52%, grade F, #246 of 471 statewide, top 59%, 371 students, 42% FRL) — zoned schools average 50% FRL vs 31% district-wide (18 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 47 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 3 sale attempts since 16y 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 $71k; list at $148k implies a 108% gain — meaningful room to come down on a strong offer.
• Cap rate 7.5% vs local median 5.9% in Redwood Falls — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

Questions for listing agent

• It's been on market 109 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1946 — 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.