503 Lake Ave

Park Rapids, MN 56470

$30,000B+

3 bd · 1.0 ba · 871 sqft · Built 1914 · SingleFamily · Active · 269 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $851/mo
• Mortgage (P&I): −$157
• Tax + insurance: −$85
• HOA: −$0
• Vac / Maint / Mgmt: −$179
• Net cashflow: $430/mo
• Annual: $5,159/yr
• Cap rate: 23.49%
• Cash-on-cash: 61.41%
• DSCR: 3.73
• 1% rule: 2.84%
• Cash to close: $8,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $30k.
• At list price, monthly cash flow is $430 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($851 rent vs $30k).
• It's been on market 269 days — a 12% lower offer ($26k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $26k (12.0% below list) — sets the bar for market timing.
• In year one you build about $3k of equity ($207 loan paydown + $3k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#240 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, crime D, employment D.
• Park Rapids Public School District (rural): math 37% / reading 48% proficiency, ranked #206 of 301 in MN (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 2.9% of price; built in 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 135 active listings in the ZIP; 27 units permitted in Hubbard County in 2024 (0 in 5+ unit buildings).
• Hubbard County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $8k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 9, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 23.5% vs local median 1.4% in Park Rapids — 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 269 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1914 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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.