12888 Scearcy Trl SW

East Gull Lake, MN 56473

$109,900B-

4 bd · 2.0 ba · 1,342 sqft · Built 1977 · SingleFamily · Pending · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,922/mo
• Mortgage (P&I): −$576
• Tax + insurance: −$85
• HOA: −$0
• Vac / Maint / Mgmt: −$404
• Net cashflow: $857/mo
• Annual: $10,282/yr
• Cap rate: 15.65%
• Cash-on-cash: 33.41%
• DSCR: 2.49
• 1% rule: 1.75%
• Cash to close: $30,772

Investor read

• This is a 4-bed/2.0-bath single-family listed at $110k.
• At list price, monthly cash flow is $857 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $110k).
• It's been on market 18 days — a 2% lower offer ($108k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $108k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $760 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#438 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: schools C-, health & safety C-, amenities F.
• Pillager Public School District (rural): math 43% / reading 51% proficiency, ranked #146 of 301 in MN (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: 31 active listings in the ZIP; 285 units permitted in Cass County in 2024 (0 in 5+ unit buildings).
• Cass County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 5 sale attempts since 6y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 15.6% vs local median 0.6% in East Gull 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.

Questions for listing agent

• Built in 1977 — 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.
• 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.