805 9th Ave SW Unit B

Perham, MN 56573

$369,500D

3 bd · 2.0 ba · 1,602 sqft · Built 2023 · SingleFamily · Active · 91 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,125/mo
• Mortgage (P&I): −$1,938
• Tax + insurance: −$616
• HOA: −$0
• Vac / Maint / Mgmt: −$656
• Net cashflow: $-85/mo
• Annual: $-1,017/yr
• Cap rate: 6.02%
• Cash-on-cash: -0.98%
• DSCR: 0.96
• 1% rule: 0.85%
• Cash to close: $103,460

Investor read

• This is a 3-bed/2.0-bath single-family listed at $370k. Condition is rated excellent.
• At list price, monthly cash flow is $-85 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $357k (3.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $312k (15.4% below list).
• It's been on market 91 days — a 9% lower offer ($336k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $312k (15.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#328 in MN) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, health & safety A+; Watch: amenities F, commute F, employment F.
• Perham-Dent Public School District (town): math 45% / reading 57% proficiency, ranked #110 of 301 in MN (top 36%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Heart of The Lake Elementary (math 54% / reading 51%, grade C-, #364 of 857 statewide, top 43%, 575 students, 47% FRL); Prairie Wind Middle (math 44% / reading 59%, grade C, #65 of 258 statewide, top 26%, 515 students, 38% FRL); Perham Senior High (math 37% / reading 62%, grade D, #143 of 471 statewide, top 33%, 505 students, 36% FRL).
• Market conditions: 93 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 140 units permitted in Otter Tail County in 2024 (48 in 5+ unit buildings).
• 5 sale attempts since 2y 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.

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 91 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• 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.