305 4th St NE

Dilworth, MN 56529

$225,000C+

3 bd · 1.0 ba · 1,780 sqft · Built 1967 · SingleFamily · Pending · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,600/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$284
• HOA: −$0
• Vac / Maint / Mgmt: −$546
• Net cashflow: $590/mo
• Annual: $7,082/yr
• Cap rate: 9.44%
• Cash-on-cash: 11.24%
• DSCR: 1.50
• 1% rule: 1.16%
• Cash to close: $63,000

Investor read

• This is a 3-bed/1.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $590 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $225k).
• It's been on market 19 days — a 2% lower offer ($222k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $222k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#275 in MN) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, employment A; Watch: crime F, amenities F, commute F.
• Dilworth-Glyndon-Felton (suburban): math 43% / reading 52% proficiency, ranked #144 of 301 in MN (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 34 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 269 units permitted in Clay County in 2024 (153 in 5+ unit buildings).
• Clay County population projected at +23% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $63k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 9.4% vs local median 4.0% in Dilworth — 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 1967 — 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 A-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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.