203 Riverside Ave

Park Rapids, MN 56470

$174,500D

3 bd · 1.5 ba · 731 sqft · Built 1902 · SingleFamily · Pending · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $859/mo
• Mortgage (P&I): −$915
• Tax + insurance: −$269
• HOA: −$0
• Vac / Maint / Mgmt: −$180
• Net cashflow: $-505/mo
• Annual: $-6,062/yr
• Cap rate: 2.82%
• Cash-on-cash: -12.41%
• DSCR: 0.45
• 1% rule: 0.49%
• Cash to close: $48,860

Investor read

• This is a 3-bed/1.5-bath single-family listed at $174k.
• At list price, monthly cash flow is $-505 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $85k (51.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $86k (50.8% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $85k (51.1% below list) — sets the bar for cash-flow.
• In year one you build about $19k of equity ($1k loan paydown + $17k appreciation (10.0% local appreciation)).
• Location reads 73/100 on livability (#240 in MN) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, health & safety A+; Watch: schools C-, crime D, employment D.
• Park Rapids Public School District (rural): math 37% / reading 48% proficiency, ranked #206 of 301 in MN (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1902 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 135 active listings in the ZIP; 27 units permitted in Hubbard County in 2024 (0 in 5+ unit buildings).
• Hubbard County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• By year 3, paydown + projected appreciation supports a ~$47k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 2.8% vs local median 1.4% in Park Rapids — 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?
• Built in 1902 — 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.
• 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?
• 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.