642 Highway 55

Medina, MN 55340

$199,900C

2 bd · 1.0 ba · 696 sqft · Built 1955 · SingleFamily · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,078/mo
• Mortgage (P&I): −$1,048
• Tax + insurance: −$245
• HOA: −$0
• Vac / Maint / Mgmt: −$436
• Net cashflow: $349/mo
• Annual: $4,186/yr
• Cap rate: 8.39%
• Cash-on-cash: 7.48%
• DSCR: 1.33
• 1% rule: 1.04%
• Cash to close: $55,972

Investor read

• This is a 2-bed/1.0-bath single-family listed at $200k.
• At list price, monthly cash flow is $349 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $200k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#756 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living F.
• Wayzata Public School District (urban): math 75% / reading 78% proficiency, ranked #2 of 301 in MN (top 1%) — strong family-tenant draw, lease renewals of 3-5y typical; only 11% free/reduced lunch — higher-income household profile.
• Zoned schools: Oakwood Elementary (math 65% / reading 65%, grade B+, #128 of 857 statewide, top 15%, 418 students, 20% FRL); Wayzata West Middle (math 69% / reading 79%, grade A, #5 of 258 statewide, top 2%, 681 students, 14% FRL); Wayzata High (math 77% / reading 84%, grade A, #2 of 471 statewide, top 0%, 3,523 students, 14% FRL).
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 257 active listings in the ZIP; 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $72k; list at $200k implies a 178% gain — meaningful room to come down on a strong offer.
• Cap rate 8.4% vs local median 1.0% in Medina — 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

• Built in 1955 — 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.
• 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.