306 7th Ave

Bovey, MN 55709

$138,500F

2 bd · 2.0 ba · 600 sqft · Built 1910 · SingleFamily · Active · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $624/mo
• Mortgage (P&I): −$726
• Tax + insurance: −$117
• HOA: −$0
• Vac / Maint / Mgmt: −$131
• Net cashflow: $-351/mo
• Annual: $-4,209/yr
• Cap rate: 3.25%
• Cash-on-cash: -10.85%
• DSCR: 0.52
• 1% rule: 0.45%
• Cash to close: $38,780

Investor read

• This is a 2-bed/2.0-bath single-family listed at $138k.
• At list price, monthly cash flow is $-351 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $77k (44.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $62k (54.9% below list).
• It's been on market 18 days — a 2% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $62k (54.9% below list) — sets the bar for 1% rule.
• In year one you build about $13k of equity ($958 loan paydown + $12k appreciation (8.9% local appreciation)).
• Location reads 65/100 on livability (#561 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment C-, crime D+, health & safety D.
• Greenway Public School District (rural): math 40% / reading 47% proficiency, ranked #196 of 301 in MN (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 29 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 121 units permitted in Itasca County in 2024 (0 in 5+ unit buildings).
• Itasca County population projected to shrink 4% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 6 sale attempts since 15y ago 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.
• Current owner paid $98k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 3, paydown + projected appreciation supports a ~$33k 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?
• Built in 1910 — 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.
• Schools are D-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?
• 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.