6231 164th St NW

Cass Lake, MN 56633

$60,000B+

3 bd · 2.0 ba · 1,008 sqft · Built 1978 · SingleFamily · Pending · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,059/mo
• Mortgage (P&I): −$315
• Tax + insurance: −$128
• HOA: −$0
• Vac / Maint / Mgmt: −$222
• Net cashflow: $394/mo
• Annual: $4,730/yr
• Cap rate: 14.18%
• Cash-on-cash: 28.16%
• DSCR: 2.25
• 1% rule: 1.77%
• Cash to close: $16,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $60k.
• At list price, monthly cash flow is $394 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $60k).
• It's been on market 69 days — a 6% lower offer ($56k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $56k (6.0% below list) — sets the bar for market timing.
• In year one you build about $5k of equity ($415 loan paydown + $4k appreciation (6.9% local appreciation)).
• Location reads 71/100 on livability (#319 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, cost of living A+, health & safety A+; Watch: crime D, schools F, amenities F.
• Cass Lake-Bena Public Schools (rural): math 14% / reading 26% proficiency, ranked #290 of 301 in MN (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 80% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 57 active listings in the ZIP; 285 units permitted in Cass County in 2024 (0 in 5+ unit buildings).
• Cass County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 10 sale attempts since 2y ago; this cycle's ask has dropped $12k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (6.9% appreciation + 3.0% rent growth), your $17k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$30k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.2% vs local median 2.3% in Cass Lake — 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 69 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D 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.