318 2nd St SE

Hallock, MN 56728

$110,000C

3 bd · 2.0 ba · 1,304 sqft · Built 1889 · SingleFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $956/mo
• Mortgage (P&I): −$577
• Tax + insurance: −$101
• HOA: −$0
• Vac / Maint / Mgmt: −$201
• Net cashflow: $77/mo
• Annual: $929/yr
• Cap rate: 7.14%
• Cash-on-cash: 3.01%
• DSCR: 1.13
• 1% rule: 0.87%
• Cash to close: $30,800

Investor read

• This is a 3-bed/2.0-bath single-family listed at $110k.
• At list price, monthly cash flow is $77 ($929/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $96k (13.1% below list).
• It's been on market 55 days — a 3% lower offer ($107k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $96k (13.1% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($761 loan paydown + $6k appreciation (5.2% local appreciation)).
• Location reads 78/100 on livability (#104 in MN, #2,386 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, cost of living A+, housing A+; Watch: amenities F, commute F.
• Kittson Central School District (rural): math 65% / reading 70% proficiency, ranked #60 of 467 in MN (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: Kittson Central Elementary (math 52% / reading 62%, grade C+, #265 of 857 statewide, top 35%, 133 students, 29% FRL); Kittson Central Secondary (math 44% / reading 54%, grade D, #143 of 471 statewide, top 33%, 109 students, 39% FRL) — zoned schools average 34% FRL vs 17% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 53% at this address vs 68% district-wide (-14 pts) — the specific schools serving this property underperform the Kittson Central School District average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1889 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 7 active listings in the ZIP; 4 units permitted in Kittson County in 2024 (0 in 5+ unit buildings).
• Kittson County population projected to shrink 8% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Current owner paid $49k; list at $110k implies a 124% gain — meaningful room to come down on a strong offer.
• At projected returns (5.2% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 6, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 55 days. Have you received any prior offers? Is the seller open to a 13% concession, seller financing, or rate buy-down credit?
• Built in 1889 — 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 A-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?
• 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.