201 E Oak Ave

Frazee, MN 56544

$124,700C

3 bd · 1.0 ba · 1,248 sqft · Built 1916 · SingleFamily · Pending · 28 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,116/mo
• Mortgage (P&I): −$654
• Tax + insurance: −$145
• HOA: −$0
• Vac / Maint / Mgmt: −$234
• Net cashflow: $83/mo
• Annual: $992/yr
• Cap rate: 7.09%
• Cash-on-cash: 2.84%
• DSCR: 1.13
• 1% rule: 0.89%
• Cash to close: $34,916

Investor read

• This is a 3-bed/1.0-bath single-family listed at $125k.
• At list price, monthly cash flow is $83 ($992/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 $112k (10.5% below list).
• It's been on market 28 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (10.5% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($862 loan paydown + $12k appreciation (10.0% local appreciation)).
• Location reads 77/100 on livability (#135 in MN, #3,013 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment F.
• Frazee-Vergas Public School District (rural): math 39% / reading 47% proficiency, ranked #196 of 301 in MN (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1916 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 74 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.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $35k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• Built in 1916 — 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.