1412 # 5-502a Burlington Rd

Two Harbors, MN 55616

$81,900B-

3 bd · 3.0 ba · 1,700 sqft · Built 2007 · Condo · Active · 446 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,316/mo
• Mortgage (P&I): −$429
• Tax + insurance: −$136
• HOA: −$113
• Vac / Maint / Mgmt: −$276
• Net cashflow: $361/mo
• Annual: $4,327/yr
• Cap rate: 11.58%
• Cash-on-cash: 18.87%
• DSCR: 1.84
• 1% rule: 1.61%
• Cash to close: $22,932

Investor read

• This is a 3-bed/3.0-bath condo listed at $82k. Condition is rated poor.
• At list price, monthly cash flow is $361 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $82k).
• It's been on market 446 days — a 12% lower offer ($72k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $72k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $566 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#62 in MN, #1,444 nationally) — a professional / high-income tenant draw. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Lake Superior Public School District (rural): math 34% / reading 53% proficiency, ranked #191 of 301 in MN (top 64%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 85 active listings in the ZIP; 81 units permitted in Lake County in 2024 (0 in 5+ unit buildings).
• Lake County population projected at -26% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $13k (14%) 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 $23k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.6% vs local median 2.6% in Two Harbors — 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 446 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — Crowdsourced image shows a dirt road and sparse vegetation, suggesting a lack of maintenance.
• Major: interior walls and paint — Listing photos show a dated interior with worn carpet and no visible updates to the walls or ceiling.
• Major: kitchen and bathrooms — No kitchen or bathroom details are visible in the provided photos, indicating a need for significant renovation.
• Major: HVAC and mechanical systems — No HVAC or mechanical details are visible in the provided photos, indicating a need for inspection and potential replacement.
• Major: landscaping and curb appeal — No landscaping or curb appeal details are visible in the provided photos, indicating a need for improvement.
• Major: roof and foundation — No roof or foundation details are visible in the provided photos, indicating a need for inspection and potential repair or replacement.