595 Tamarack Trl #1301

Farmington, MN 55024

$215,000D+

2 bd · 2.0 ba · 1,609 sqft · Built 2001 · Townhouse · Pending · 53 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,307/mo
• Mortgage (P&I): −$1,127
• Tax + insurance: −$320
• HOA: −$410
• Vac / Maint / Mgmt: −$485
• Net cashflow: $-35/mo
• Annual: $-422/yr
• Cap rate: 6.10%
• Cash-on-cash: -0.70%
• DSCR: 0.97
• 1% rule: 1.07%
• Cash to close: $60,200

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $215k.
• At list price, monthly cash flow is $-35 ($-422/yr) — negative.
• To cash-flow at today's rent, offer at most $209k (2.9% below list).
• Meets the 1% rule at list price ($2k rent vs $215k).
• It's been on market 53 days — a 3% lower offer ($209k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $209k (3.0% below list) — sets the bar for market timing.
• 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 75/100 on livability (#203 in MN, #4,269 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F.
• Farmington Public School District (suburban): math 43% / reading 52% proficiency, ranked #104 of 301 in MN (top 35%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 12% free/reduced lunch — higher-income household profile.
• Market conditions: 325 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 2,134 units permitted in Dakota County in 2024 (898 in 5+ unit buildings).
• Dakota County population projected at +11% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 7y ago; this cycle's ask has dropped $45k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 6.1% vs local median 3.8% in Farmington — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 53 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.