106 NE Oak St

Brownsdale, MN 55918

$110,000C-

3 bd · 1.0 ba · 956 sqft · Built 1925 · SingleFamily · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $964/mo
• Mortgage (P&I): −$577
• Tax + insurance: −$108
• HOA: −$0
• Vac / Maint / Mgmt: −$202
• Net cashflow: $77/mo
• Annual: $920/yr
• Cap rate: 7.13%
• Cash-on-cash: 2.99%
• DSCR: 1.13
• 1% rule: 0.88%
• Cash to close: $30,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $110k.
• At list price, monthly cash flow is $77 ($920/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 $96k (12.4% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $96k (12.4% below list) — sets the bar for 1% rule.
• In year one you build about $10k of equity ($761 loan paydown + $9k appreciation (8.3% local appreciation)).
• Location reads 65/100 on livability (#558 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime D+, amenities F, commute F.
• Hayfield Public School District (rural): math 29% / reading 38% proficiency, ranked #254 of 301 in MN (top 84%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Hayfield Elementary (math 42% / reading 32%, grade F, #636 of 857 statewide, top 76%, 282 students, 50% FRL); Hayfield Secondary (math 17% / reading 41%, grade F, #365 of 471 statewide, top 77%, 363 students, 36% FRL) — zoned schools average 43% FRL vs 24% district-wide (19 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 5 active listings in the ZIP; 53 units permitted in Mower County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts since 23y ago; this cycle's ask is 100% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $57k; list at $110k implies a 93% gain — meaningful room to come down on a strong offer.
• At projected returns (8.3% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, 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 1925 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.