510 Monroe St SE

Hutchinson, MN 55350

$149,900D

2 bd · 1.0 ba · 564 sqft · Built 1886 · SingleFamily · Active · 58 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,099/mo
• Mortgage (P&I): −$786
• Tax + insurance: −$150
• HOA: −$0
• Vac / Maint / Mgmt: −$231
• Net cashflow: $-68/mo
• Annual: $-810/yr
• Cap rate: 5.75%
• Cash-on-cash: -1.93%
• DSCR: 0.91
• 1% rule: 0.73%
• Cash to close: $41,972

Investor read

• This is a 2-bed/1.0-bath single-family listed at $150k.
• At list price, monthly cash flow is $-68 ($-810/yr) — negative.
• To cash-flow at today's rent, offer at most $138k (8.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $110k (26.7% below list).
• It's been on market 58 days — a 3% lower offer ($145k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $110k (26.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 80/100 on livability (#72 in MN, #1,744 nationally) — a professional / high-income tenant draw. Strengths: cost of living A+, housing A+, health & safety A+; Watch: commute F.
• Hutchinson Public School District (town): math 56% / reading 56% proficiency, ranked #62 of 301 in MN (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1886 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 115 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 57 units permitted in McLeod County in 2024 (0 in 5+ unit buildings).
• McLeod County population projected at -20% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts; this cycle's ask has dropped $35k (19%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 5.8% vs local median 3.0% in Hutchinson — 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?
• It's been on market 58 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1886 — 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.
• 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.