539 State 6 NE

Crooked Lake, MN 56662

$175,000D

3 bd · 2.0 ba · 1,534 sqft · Built 1970 · SingleFamily · Active · 53 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,286/mo
• Mortgage (P&I): −$918
• Tax + insurance: −$149
• HOA: −$0
• Vac / Maint / Mgmt: −$270
• Net cashflow: $-51/mo
• Annual: $-607/yr
• Cap rate: 5.95%
• Cash-on-cash: -1.24%
• DSCR: 0.94
• 1% rule: 0.73%
• Cash to close: $49,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $175k.
• At list price, monthly cash flow is $-51 ($-607/yr) — negative.
• To cash-flow at today's rent, offer at most $166k (5.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $129k (26.5% below list).
• It's been on market 53 days — a 3% lower offer ($170k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $129k (26.5% below list) — sets the bar for 1% rule.
• In year one you build about $9k of equity ($1k loan paydown + $8k appreciation (4.5% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Northland Community Schools (rural): math 25% / reading 35% proficiency, ranked #395 of 467 in MN (top 85%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Northland Elementary (math 12% / reading 27%, grade F, #759 of 857 statewide, top 90%, 197 students, 81% FRL); Northland Secondary (math 15% / reading 27%, grade F, #416 of 471 statewide, top 88%, 157 students, 77% FRL) — zoned schools average 79% FRL vs 57% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 19 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.
• 3 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.
• At projected returns (4.5% appreciation + 3.0% rent growth), your $49k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

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?
• It's been on market 53 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1970 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.