3522 Colfax Ave N

Minneapolis, MN 55412

$127,000B-

1 bd · 1.0 ba · 632 sqft · Built 1912 · SingleFamily · Active · 107 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,297/mo
• Mortgage (P&I): −$666
• Tax + insurance: −$87
• HOA: −$0
• Vac / Maint / Mgmt: −$272
• Net cashflow: $271/mo
• Annual: $3,257/yr
• Cap rate: 8.86%
• Cash-on-cash: 9.16%
• DSCR: 1.41
• 1% rule: 1.02%
• Cash to close: $35,560

Investor read

• This is a 1-bed/1.0-bath single-family listed at $127k.
• At list price, monthly cash flow is $271 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $127k).
• It's been on market 107 days — a 9% lower offer ($116k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $116k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $878 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#110 in MN, #2,525 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, crime F.
• Minneapolis Public School District (urban): math 35% / reading 46% proficiency, ranked #217 of 301 in MN (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Nellie Stone Johnson Elementary (math 2% / reading 17%, grade F, #829 of 857 statewide, top 98%, 201 students, 96% FRL); Franklin Middle (math 2% / reading 8%, grade F, #255 of 258 statewide, top 100%, 287 students, 89% FRL); Henry High (reading 70%, 858 students, 80% FRL) — zoned schools average 88% FRL vs 58% district-wide (30 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 7% at this address vs 40% district-wide (-33 pts) — the specific schools serving this property underperform the Minneapolis Public School District average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1912 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.3%/yr); 167 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); 4,651 units permitted in Hennepin County in 2024 (2,443 in 5+ unit buildings).
• Hennepin County population projected at +30% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 10 sale attempts since 34y ago; this cycle's ask has dropped $28k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $90k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 6.3% rent growth), your $36k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 8.9% vs local median 3.1% in Minneapolis — 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

• It's been on market 107 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1912 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• Crime grade is F 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?
• 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.