1120 5th Ave Ave NW

East Grand Forks, MN 56721

$239,900B-

24 bd · 4.5 ba · 2,224 sqft · Built — · MultiFamily · Active · 125 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,060/mo
• Mortgage (P&I): −$1,258
• Tax + insurance: −$400
• HOA: −$0
• Vac / Maint / Mgmt: −$853
• Net cashflow: $1,550/mo
• Annual: $18,594/yr
• Cap rate: 14.04%
• Cash-on-cash: 27.68%
• DSCR: 2.23
• 1% rule: 1.69%
• Cash to close: $67,172

Investor read

• This is a 1×3bd/1ba + 1×3bd/1.5ba + 1×2bd/1ba units multifamily listed at $240k. Condition is rated fair.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $517/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $240k).
• It's been on market 125 days — a 12% lower offer ($211k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $211k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#167 in MN, #3,598 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, health & safety A+; Watch: amenities D, commute F.
• East Grand Forks Public School District (suburban): math 42% / reading 49% proficiency, ranked #168 of 301 in MN (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 61 active listings in the ZIP; solid renter incomes; 42 units permitted in Polk County in 2024 (0 in 5+ unit buildings).
• Polk County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 8 sale attempts since 7y 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 $120k; list at $240k implies a 100% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $67k cash investment doubles in ~5 years — after that, you're playing with house money.
• Cap rate 14.0% vs local median 3.1% in East Grand Forks — 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 $4,060/mo this rent would consume 59% of the median local household income ($83k/yr) (locally 276% 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 125 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Moderate: Kitchen cabinets — Worn appearance and need for cleaning.
• Moderate: Bathroom fixtures — Dated and need replacement.
• Minor: Paint — Faded in some areas, could be refreshed with a fresh coat.