7256 Kahler Cir NE

Otsego, MN 55301

$279,900C

4 bd · 1.0 ba · 1,729 sqft · Built 2007 · Townhouse · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,860/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$308
• HOA: −$313
• Vac / Maint / Mgmt: −$601
• Net cashflow: $170/mo
• Annual: $2,044/yr
• Cap rate: 7.02%
• Cash-on-cash: 2.61%
• DSCR: 1.12
• 1% rule: 1.02%
• Cash to close: $78,372

Investor read

• This is a 4-bed/1.0-bath townhouse listed at $280k.
• At list price, monthly cash flow is $170 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $280k).
• It's been on market 16 days — a 2% lower offer ($276k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $276k (1.5% 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 $8k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#367 in MN) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A-; Watch: cost of living C-, amenities F, commute F.
• Independent School District 728 (suburban): math 56% / reading 60% proficiency, ranked #37 of 301 in MN (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Market conditions: 141 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 1,260 units permitted in Wright County in 2024 (180 in 5+ unit buildings).
• Wright County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 19y 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 $125k; list at $280k implies a 124% gain — meaningful room to come down on a strong offer.
• Cap rate 7.0% vs local median 4.0% in Otsego — 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 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?
• 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.