206 SW 7th St

Brainerd, MN 56401

$102,000C-

1 bd · 1.0 ba · 480 sqft · Built 1908 · SingleFamily · Active · 58 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $986/mo
• Mortgage (P&I): −$535
• Tax + insurance: −$121
• HOA: −$0
• Vac / Maint / Mgmt: −$207
• Net cashflow: $123/mo
• Annual: $1,475/yr
• Cap rate: 7.74%
• Cash-on-cash: 5.16%
• DSCR: 1.23
• 1% rule: 0.97%
• Cash to close: $28,560

Investor read

• This is a 1-bed/1.0-bath single-family listed at $102k.
• At list price, monthly cash flow is $123 ($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 $99k (3.3% below list).
• It's been on market 58 days — a 3% lower offer ($99k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $99k (3.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $705 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#272 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: crime D, amenities F, commute F.
• Brainerd Public School District (town): math 49% / reading 58% proficiency, ranked #85 of 301 in MN (top 28%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 408 active listings in the ZIP; 420 units permitted in Crow Wing County in 2024 (17 in 5+ unit buildings).
• Crow Wing County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 4 sale attempts since 12y 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 $39k; list at $102k implies a 162% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 3.4% in Brainerd — 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.
• This rent is only 16% of the median local income ($73k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

Questions for listing agent

• It's been on market 58 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1908 — 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 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?
• 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.
• 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.