408 N Main St

Sherburn, MN 56171

$130,000D+

3 bd · 2.0 ba · 1,438 sqft · Built 1956 · SingleFamily · Pending · 7 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,207/mo
• Mortgage (P&I): −$682
• Tax + insurance: −$201
• HOA: −$0
• Vac / Maint / Mgmt: −$254
• Net cashflow: $71/mo
• Annual: $852/yr
• Cap rate: 6.95%
• Cash-on-cash: 2.34%
• DSCR: 1.10
• 1% rule: 0.93%
• Cash to close: $36,400

Investor read

• This is a 3-bed/2.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $71 ($852/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 $121k (7.1% below list).
• Only 7 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $121k (7.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $899 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#286 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A; Watch: health & safety D+, amenities F, commute F.
• Martin County West School District (rural): math 38% / reading 50% proficiency, ranked #187 of 301 in MN (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 17 active listings in the ZIP; 19 units permitted in Martin County in 2024 (0 in 5+ unit buildings).
• Martin County population projected at -19% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.

Questions for listing agent

• Built in 1956 — 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.