244 5th St NW

Forest Lake, MN 55025

$299,900D-

4 bd · 2.0 ba · 1,710 sqft · Built 1981 · SingleFamily · Coming Soon · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,334/mo
• Mortgage (P&I): −$1,573
• Tax + insurance: −$386
• HOA: −$0
• Vac / Maint / Mgmt: −$490
• Net cashflow: $-115/mo
• Annual: $-1,375/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.64%
• DSCR: 0.93
• 1% rule: 0.78%
• Cash to close: $83,972

Investor read

• This is a 4-bed/2.0-bath single-family listed at $300k.
• At list price, monthly cash flow is $-115 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $280k (6.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $233k (22.2% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $233k (22.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#194 in MN, #4,132 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, employment A+, housing A+; Watch: cost of living C-, amenities F, commute F.
• Forest Lake Public School District (town): math 48% / reading 52% proficiency, ranked #90 of 301 in MN (top 30%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.3%/yr); 164 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 1,405 units permitted in Washington County in 2024 (121 in 5+ unit buildings).
• Washington County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 30y ago; this cycle's ask is 23% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $245k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.8% vs local median 3.0% in Forest Lake — 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.