4223 W 5th St

Duluth, MN 55807

$200,000D

3 bd · 1.0 ba · 1,142 sqft · Built 1919 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,725/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$348
• HOA: −$0
• Vac / Maint / Mgmt: −$362
• Net cashflow: $-34/mo
• Annual: $-410/yr
• Cap rate: 6.09%
• Cash-on-cash: -0.73%
• DSCR: 0.97
• 1% rule: 0.86%
• Cash to close: $56,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $-34 ($-410/yr) — negative.
• To cash-flow at today's rent, offer at most $194k (3.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $173k (13.7% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $173k (13.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#36 in MN, #1,060 nationally) — a professional / high-income tenant draw. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities F.
• Duluth Public School District (urban): math 44% / reading 55% proficiency, ranked #132 of 301 in MN (top 44%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Laura Macarthur Elementary (math 22% / reading 27%, grade F, #722 of 857 statewide, top 85%, 320 students, 76% FRL); Lincoln Park Middle School (math 26% / reading 39%, grade F, #186 of 258 statewide, top 72%, 524 students, 66% FRL); Denfeld High School (math 32% / reading 42%, grade F, #282 of 471 statewide, top 63%, 940 students, 56% FRL) — zoned schools average 66% FRL vs 39% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 31% at this address vs 50% district-wide (-18 pts) — the specific schools serving this property underperform the Duluth Public School District average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1919 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 50 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• Current owner paid $85k; list at $200k implies a 135% gain — meaningful room to come down on a strong offer.
• Cap rate 6.1% vs local median 4.9% in Duluth — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 33% of the median local income ($62k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1919 — 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.