1006 State Street North St

New Ulm, MN 56073

$213,900D-

3 bd · 1.0 ba · 1,385 sqft · Built 1928 · SingleFamily · Pending · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,800/mo
• Mortgage (P&I): −$1,122
• Tax + insurance: −$306
• HOA: −$0
• Vac / Maint / Mgmt: −$378
• Net cashflow: $-6/mo
• Annual: $-66/yr
• Cap rate: 6.26%
• Cash-on-cash: -0.11%
• DSCR: 1.00
• 1% rule: 0.84%
• Cash to close: $59,892

Investor read

• This is a 3-bed/1.0-bath single-family listed at $214k.
• At list price, monthly cash flow is $-6 ($-66/yr) — negative.
• To cash-flow at today's rent, offer at most $213k (0.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $180k (15.8% below list).
• It's been on market 20 days — a 2% lower offer ($211k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $180k (15.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#39 in MN, #1,102 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: commute F.
• New Ulm Public School District (town): math 51% / reading 51% proficiency, ranked #104 of 301 in MN (top 35%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 85 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 41 units permitted in Brown County in 2024 (18 in 5+ unit buildings).
• Brown County population projected at -14% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $75k; list at $214k implies a 185% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 4.1% in New Ulm — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Built in 1928 — 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.
• 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?
• 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.