122 1st Ave NE

Clara City, MN 56222

$169,000B

3 bd · 2.0 ba · 1,887 sqft · Built 1945 · SingleFamily · Active · 95 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,652/mo
• Mortgage (P&I): −$886
• Tax + insurance: −$179
• HOA: −$0
• Vac / Maint / Mgmt: −$557
• Net cashflow: $1,030/mo
• Annual: $12,363/yr
• Cap rate: 13.61%
• Cash-on-cash: 26.13%
• DSCR: 2.16
• 1% rule: 1.57%
• Cash to close: $47,320

Investor read

• This is a 3-bed/2.0-bath single-family listed at $169k.
• At list price, monthly cash flow is $1k ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $169k).
• It's been on market 95 days — a 9% lower offer ($154k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $154k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#244 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F, employment D-.
• Maccray School District (rural): math 41% / reading 46% proficiency, ranked #188 of 301 in MN (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 13 units permitted in Chippewa County in 2024 (0 in 5+ unit buildings).
• Chippewa County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask has dropped $10k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $42k; list at $169k implies a 298% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $47k cash investment doubles in ~5 years — after that, you're playing with house money.

Questions for listing agent

• It's been on market 95 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1945 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.