11000 NW Highway 10 Lot 37

Rice, MN 56367

$40,000B

3 bd · 2.0 ba · 1,280 sqft · Built 1997 · Other · Pending · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,065/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$30
• HOA: −$0
• Vac / Maint / Mgmt: −$224
• Net cashflow: $602/mo
• Annual: $7,225/yr
• Cap rate: 24.36%
• Cash-on-cash: 64.51%
• DSCR: 3.87
• 1% rule: 2.66%
• Cash to close: $11,200

Investor read

• This is a 3-bed/2.0-bath other listed at $40k.
• At list price, monthly cash flow is $602 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 80 days — a 6% lower offer ($38k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $38k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $277 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#222 in MN, #4,751 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, cost of living A+; Watch: health & safety D+, amenities F, commute F.
• Sauk Rapids-Rice Public Schools (rural): math 42% / reading 51% proficiency, ranked #156 of 301 in MN (top 52%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 46 active listings in the ZIP; 82 units permitted in Benton County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $20k (33%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Cap rate 24.4% vs local median 0.8% in Rice — 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

• It's been on market 80 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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?
• 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.