5905 Country Club Rd

Shorewood, MN 55331

$489,900D

3 bd · 2.5 ba · 2,319 sqft · Built 1976 · SingleFamily · Pending · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,920/mo
• Mortgage (P&I): −$2,569
• Tax + insurance: −$673
• HOA: −$0
• Vac / Maint / Mgmt: −$823
• Net cashflow: $-145/mo
• Annual: $-1,744/yr
• Cap rate: 5.94%
• Cash-on-cash: -1.27%
• DSCR: 0.94
• 1% rule: 0.80%
• Cash to close: $137,172

Investor read

• This is a 3-bed/2.5-bath single-family listed at $490k.
• At list price, monthly cash flow is $-145 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $464k (5.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $392k (20.0% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $392k (20.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#464 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living F.
• Minnetonka Public School District (suburban): math 68% / reading 74% proficiency, ranked #6 of 301 in MN (top 2%) — strong family-tenant draw, lease renewals of 3-5y typical; only 5% free/reduced lunch — higher-income household profile.
• Zoned schools: Minnewashta Elementary (math 69% / reading 71%, grade A-, #71 of 857 statewide, top 8%, 904 students, 5% FRL); Minnetonka West Middle (math 59% / reading 75%, grade A-, #11 of 258 statewide, top 5%, 1,274 students, 9% FRL); Minnetonka Senior High (math 68% / reading 80%, grade B+, #10 of 471 statewide, top 2%, 3,508 students, 11% FRL) — zoned schools at 9% FRL track the district average.
• Market conditions: Rents rising fast (+11.1%/yr); 244 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 12d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 5.9% vs local median 0.8% in Shorewood — 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

• 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 1976 — 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.
• 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.