6392 US Highway 75

Lake Valley, MN 56296

$129,900C

3 bd · 1.0 ba · 1,296 sqft · Built 1971 · SingleFamily · Active · 79 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,154/mo
• Mortgage (P&I): −$681
• Tax + insurance: −$124
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $106/mo
• Annual: $1,275/yr
• Cap rate: 7.27%
• Cash-on-cash: 3.50%
• DSCR: 1.16
• 1% rule: 0.89%
• Cash to close: $36,372

Investor read

• This is a 3-bed/1.0-bath single-family listed at $130k.
• At list price, monthly cash flow is $106 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $115k (11.1% below list).
• It's been on market 79 days — a 6% lower offer ($122k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (11.1% below list) — sets the bar for 1% rule.
• In year one you build about $11k of equity ($898 loan paydown + $10k appreciation (7.5% local appreciation)).
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Wheaton Area Public School District (rural): math 60% / reading 60% proficiency, ranked #149 of 467 in MN (top 32%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 6 active listings in the ZIP; 4 units permitted in Traverse County in 2024 (0 in 5+ unit buildings).
• Traverse County population projected to shrink 10% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $10k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $110k; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (7.5% appreciation + 3.0% rent growth), your $36k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.

Questions for listing agent

• It's been on market 79 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• Built in 1971 — 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.
• 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.