1702 1st Ave

International Falls, MN 56649

$89,000D-

1 bd · 2.0 ba · 480 sqft · Built 1927 · SingleFamily · Active · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $769/mo
• Mortgage (P&I): −$467
• Tax + insurance: −$116
• HOA: −$0
• Vac / Maint / Mgmt: −$161
• Net cashflow: $24/mo
• Annual: $292/yr
• Cap rate: 6.62%
• Cash-on-cash: 1.17%
• DSCR: 1.05
• 1% rule: 0.86%
• Cash to close: $24,920

Investor read

• This is a 1-bed/2.0-bath single-family listed at $89k.
• At list price, monthly cash flow is $24 ($292/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 $77k (13.6% below list).
• It's been on market 69 days — a 6% lower offer ($84k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $77k (13.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $615 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#242 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime F, amenities D-, commute F.
• International Falls School District (town): math 40% / reading 45% proficiency, ranked #211 of 301 in MN (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Falls Elementary (math 52% / reading 52%, grade C-, #368 of 857 statewide, top 47%, 393 students, 49% FRL); Falls Secondary (math 32% / reading 41%, grade F, #298 of 471 statewide, top 63%, 501 students, 38% FRL).
• Watch-outs: built in 1927 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 70 active listings in the ZIP; 26 units permitted in Koochiching County in 2024 (0 in 5+ unit buildings).
• Koochiching County population projected at -27% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts 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.
• Cap rate 6.6% vs local median 4.5% in International Falls — 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 14% concession, seller financing, or rate buy-down credit?
• Built in 1927 — 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.
• Crime grade is F 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?
• 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.