18423 Eldorado Way

Farmington, MN 55024

$399,000F

3 bd · 2.0 ba · 1,945 sqft · Built 1994 · SingleFamily · Pending · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,517/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$507
• HOA: −$0
• Vac / Maint / Mgmt: −$529
• Net cashflow: $-611/mo
• Annual: $-7,331/yr
• Cap rate: 4.46%
• Cash-on-cash: -6.56%
• DSCR: 0.71
• 1% rule: 0.63%
• Cash to close: $111,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $399k.
• At list price, monthly cash flow is $-611 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $291k (27.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $252k (36.9% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $252k (36.9% 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 $12k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#203 in MN, #4,269 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F.
• Farmington Public School District (suburban): math 43% / reading 52% proficiency, ranked #104 of 301 in MN (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 12% free/reduced lunch — higher-income household profile.
• Market conditions: 326 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 23y 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 $227k; list at $399k implies a 76% gain — meaningful room to come down on a strong offer.

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?
• 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.