1507 9th St SE

Forest Lake, MN 55025

$359,900D-

4 bd · 1.5 ba · 1,948 sqft · Built 1988 · SingleFamily · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,733/mo
• Mortgage (P&I): −$1,887
• Tax + insurance: −$555
• HOA: −$0
• Vac / Maint / Mgmt: −$574
• Net cashflow: $-284/mo
• Annual: $-3,403/yr
• Cap rate: 5.35%
• Cash-on-cash: -3.38%
• DSCR: 0.85
• 1% rule: 0.76%
• Cash to close: $100,772

Investor read

• This is a 4-bed/1.5-bath single-family listed at $360k.
• At list price, monthly cash flow is $-284 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $310k (13.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $273k (24.1% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $273k (24.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#194 in MN, #4,132 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, employment A+, housing A+; Watch: cost of living C-, amenities F, commute F.
• Forest Lake Public School District (town): math 48% / reading 52% proficiency, ranked #90 of 301 in MN (top 30%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.3%/yr); 164 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 1,405 units permitted in Washington County in 2024 (121 in 5+ unit buildings).
• Washington County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 33y 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 $128k; list at $360k implies a 180% gain — meaningful room to come down on a strong offer.
• Cap rate 5.3% vs local median 3.1% in Forest Lake — 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 runs 33% of the median local income ($98k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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.
• 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.