605 Main St

Tower, MN 55790

$329,900B-

8 bd · 4.0 ba · 2,976 sqft · Built 1982 · MultiFamily · Active · 77 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,306/mo
• Mortgage (P&I): −$1,730
• Tax + insurance: −$201
• HOA: −$0
• Vac / Maint / Mgmt: −$694
• Net cashflow: $681/mo
• Annual: $8,173/yr
• Cap rate: 8.77%
• Cash-on-cash: 8.85%
• DSCR: 1.39
• 1% rule: 1.00%
• Cash to close: $92,372

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $330k.
• At list price, monthly cash flow is $681 ($8k/yr) — positive. Per door: $170/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $330k).
• It's been on market 77 days — a 6% lower offer ($310k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $310k (6.0% below list) — sets the bar for market timing.
• In year one you build about $35k of equity ($2k loan paydown + $33k appreciation (10.0% local appreciation)).
• Location reads 65/100 on livability (#517 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, schools B; Watch: crime C-, employment C-, health & safety D.
• St. Louis County School District (rural): math 34% / reading 49% proficiency, ranked #212 of 301 in MN (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 128 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 3 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $100k; list at $330k implies a 230% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $92k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$57k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 8.8% vs local median 0.4% in Tower — 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

• It's been on market 77 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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.
• 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?
• 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.