627 W 1st St S

Cottonwood, MN 56229

$150,000D+

5 bd · 3.0 ba · 3,102 sqft · Built 1910 · SingleFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,440/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$298
• HOA: −$0
• Vac / Maint / Mgmt: −$302
• Net cashflow: $53/mo
• Annual: $640/yr
• Cap rate: 6.72%
• Cash-on-cash: 1.52%
• DSCR: 1.07
• 1% rule: 0.96%
• Cash to close: $42,000

Investor read

• This is a 5-bed/3.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $53 ($640/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $144k (4.0% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $144k (4.0% 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 $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#294 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: health & safety D+, amenities F, commute F.
• Lakeview School District (rural): math 51% / reading 55% proficiency, ranked #81 of 301 in MN (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lakeview Elementary (math 57% / reading 62%, grade B-, #216 of 857 statewide, top 29%, 398 students, 42% FRL); Lakeview Secondary (math 42% / reading 47%, grade F, #189 of 471 statewide, top 44%, 315 students, 33% FRL) — zoned schools average 38% FRL vs 21% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 4 active listings in the ZIP; 91 units permitted in Lyon County in 2024 (72 in 5+ unit buildings).
• Lyon County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 4 sale attempts since 13y 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.

Questions for listing agent

• Built in 1910 — 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.