8380 Isle Ave S

Cottage Grove, MN 55016

$350,000D

4 bd · 1.0 ba · 1,896 sqft · Built 1970 · SingleFamily · Pending · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,761/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$462
• HOA: −$0
• Vac / Maint / Mgmt: −$580
• Net cashflow: $-115/mo
• Annual: $-1,385/yr
• Cap rate: 5.90%
• Cash-on-cash: -1.41%
• DSCR: 0.94
• 1% rule: 0.79%
• Cash to close: $98,000

Investor read

• This is a 4-bed/1.0-bath single-family listed at $350k.
• At list price, monthly cash flow is $-115 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $330k (5.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $276k (21.1% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $276k (21.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#132 in MN, #2,948 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living C-, amenities F, commute F.
• South Washington County School District (suburban): math 52% / reading 61% proficiency, ranked #40 of 301 in MN (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Zoned schools: Nuevas Fronteras Spanish Immersion (math 47% / reading 47%, grade D-, #492 of 857 statewide, top 61%, 499 students, 16% FRL); Oltman Middle School (math 36% / reading 54%, grade D, #113 of 258 statewide, top 45%, 969 students, 36% FRL); Park High School (math 39% / reading 63%, grade D+, #127 of 471 statewide, top 27%, 1,938 students, 33% FRL).
• Market conditions: Rents rising (+3.8%/yr); 401 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 1,405 units permitted in Washington County in 2024 (121 in 5+ unit buildings).
• Washington County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 33y 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.
• Cap rate 5.9% vs local median 3.4% in Cottage Grove — 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?
• Built in 1970 — 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.
• 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.