12329 71st St NE

Otsego, MN 55330

$425,000D-

4 bd · 3.0 ba · 1,988 sqft · Built 2026 · Other · Active · 10 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,980/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$270
• HOA: −$0
• Vac / Maint / Mgmt: −$626
• Net cashflow: $-145/mo
• Annual: $-1,743/yr
• Cap rate: 5.88%
• Cash-on-cash: -1.47%
• DSCR: 0.93
• 1% rule: 0.70%
• Cash to close: $119,000

Investor read

• This is a 4-bed/3.0-bath other listed at $425k.
• At list price, monthly cash flow is $-145 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $399k (6.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $298k (29.9% below list).
• Only 10 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $298k (29.9% 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 $13k 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: 453 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• Cap rate 5.9% 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.
• This rent runs 31% of the median local income ($116k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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.
• 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.