23478 Farwell Ave

Warsaw, MN 55087

$32,000B

2 bd · 1.0 ba · 672 sqft · Built 1950 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $905/mo
• Mortgage (P&I): −$168
• Tax + insurance: −$58
• HOA: −$0
• Vac / Maint / Mgmt: −$190
• Net cashflow: $489/mo
• Annual: $5,866/yr
• Cap rate: 24.62%
• Cash-on-cash: 65.47%
• DSCR: 3.91
• 1% rule: 2.83%
• Cash to close: $8,960

Investor read

• This is a 2-bed/1.0-bath single-family listed at $32k.
• At list price, monthly cash flow is $489 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($905 rent vs $32k).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $536 of equity ($221 loan paydown + $315 appreciation (1.0% local appreciation)).
• Location reads 66/100 on livability (#483 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, cost of living A-; Watch: schools D+, amenities F, commute F.
• Faribault Public School District (town): math 17% / reading 34% proficiency, ranked #275 of 301 in MN (top 91%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 3 active listings in the ZIP; 93 units permitted in Rice County in 2024 (0 in 5+ unit buildings).
• At projected returns (1.0% appreciation + 3.0% rent growth), your $9k cash investment doubles in ~2 years — after that, you're playing with house money.

Questions for listing agent

• Built in 1950 — 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?
• 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.