5165 Howard Gnesen Rd

Rice Lake, MN 55803

$175,000B+

3 bd · 1.0 ba · 1,064 sqft · Built 1979 · SingleFamily · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,245/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$205
• HOA: −$0
• Vac / Maint / Mgmt: −$471
• Net cashflow: $650/mo
• Annual: $7,805/yr
• Cap rate: 10.75%
• Cash-on-cash: 15.93%
• DSCR: 1.71
• 1% rule: 1.28%
• Cash to close: $49,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $175k.
• At list price, monthly cash flow is $650 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $175k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• 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 67/100 on livability (#426 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A; Watch: health & safety D+, schools D, 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.
• Market conditions: 107 active listings in the ZIP; solid renter incomes; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 2 sale attempts since 22y ago 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 $70k; list at $175k implies a 150% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~8 years — after that, you're playing with house money.
• Cap rate 10.8% vs local median 2.5% in Rice 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

• Built in 1979 — 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.