309/311 2nd St S

Virginia, MN 55792

$114,900B

3 bd · 3.0 ba · 2,664 sqft · Built 1910 · MultiFamily · Active · 242 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,976/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$266
• HOA: −$0
• Vac / Maint / Mgmt: −$625
• Net cashflow: $1,483/mo
• Annual: $17,793/yr
• Cap rate: 21.78%
• Cash-on-cash: 55.31%
• DSCR: 3.46
• 1% rule: 2.59%
• Cash to close: $32,172

Investor read

• This is a 2×1bd/1.0ba + 1×2bd/3.0ba units multifamily listed at $115k.
• At list price, monthly cash flow is $1k ($18k/yr) — positive. Per door: $494/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $115k).
• It's been on market 242 days — a 12% lower offer ($101k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $101k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $794 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#664 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: schools C-, crime D, health & safety D.
• Watch-outs: built in 1910 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 64 active listings in the ZIP; 639 units permitted in St. Louis County in 2024 (338 in 5+ unit buildings).
• 2 sale attempts; this cycle's ask has dropped $15k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $66k; list at $115k implies a 74% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $32k cash investment doubles in ~3 years — after that, you're playing with house money.
• Cap rate 21.8% vs local median 7.5% in Virginia — 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.
• At $2,976/mo this rent would consume 66% of the median local household income ($54k/yr) (locally 286% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 242 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1910 — 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 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.