What if you could buy a cash-flowing investment property today that’s positioned directly in the path of a $5.6 billion economic wave—and start collecting rent checks immediately?
That’s exactly what happened when Hayfield investors buy Stewartville commercial building in May 2025. Nick Matti and Trevor Anderson led an investment group that purchased the Professional Building at 100 Second St. SE in downtown Stewartville for $775,000.
The deal closed on May 1, 2025, and represents something remarkable. They paid $113,200 more than the county’s assessment of $661,800. Why would smart investors do that?
The answer lies in immediate cash flow. Six of the building’s eight units are already leased to established businesses. That means rental income starts from day one—no waiting, no uncertainty.
This case study reveals a replicable investment strategy for anyone considering commercial real estate in secondary markets. You’ll discover the financial breakdown, location advantages, and risk assessment that made this deal work.
Here’s everything you need to know about this strategic small-town investment.
Hayfield Investors Buy Stewartville Commercial Building: The Complete Deal Overview
Nick Matti and Trevor Anderson made headlines with their $775,000 acquisition of the Professional Building. This 7,600-square-foot property sits in the heart of downtown Stewartville, just 10 miles south of Rochester.
The building features eight tenant units, with six currently generating rental income. That 75% occupancy rate provided immediate cash flow—a critical advantage over empty buildings that drain money while you search for tenants.
Who Are Nick Matti and Trevor Anderson?
Matti brings unique experience to real estate investing. He worked as a Mayo Clinic nurse before launching an online health coaching business. That Mayo connection gave him insider knowledge of Rochester’s medical economy.
Anderson, a Hayfield native, understands the regional market dynamics. Their shared roots in Hayfield—a small town near Stewartville—provided local knowledge that out-of-state investors lack.
“Our eventual goal is to do bigger deals and help people invest their money into something that could earn them a better return than in the stock market,” Matti explained.
This Professional Building purchase serves as their proof-of-concept deal. Success here opens doors to larger properties and potential syndication opportunities.
The previous owner, Olstad Rentals LLC, purchased the building for $675,000 in April 2024. Just 13 months later, they sold it for $775,000—a $100,000 gain that signals strong market momentum.
Breaking Down the $775,000 Investment: ROI and Financial Analysis
Let’s examine the numbers that make this deal attractive. The purchase price works out to $102 per square foot—reasonable for downtown commercial property with established tenants.
Here’s the estimated cash flow breakdown:
Annual Income Projection:
- Gross rental income (6,300 sq ft occupied): $88,200 (at $14/sq ft)
- Property taxes: -$13,000
- Insurance: -$8,000
- Maintenance reserve: -$10,000
- Property management: -$5,000
- Net Operating Income (NOI): $52,200
Financing Impact:
- Estimated down payment (20%): $155,000
- Loan amount: $620,000
- Annual mortgage payment (7.5%): -$52,000
- Annual cash flow: $200
Wait—only $200 annual cash flow? That seems weak until you understand the full picture.
Why They Paid Above Assessment Value
The Olmsted County assessment of $661,800 reflects tax purposes, not market value. Income-producing properties are valued on their cash flow potential, not just their physical structure.
The previous owner’s $100,000 profit in just 13 months demonstrates real market momentum. Downtown locations command premiums over suburban properties due to visibility and foot traffic.
Plus, those two vacant units represent significant upside potential.
The Income Upside: Filling Two Vacant Units
The remaining 1,300 square feet of vacant space could generate an additional $18,200 annually (at $14/sq ft). That would increase NOI to $70,400.
With full occupancy, the cash-on-cash return jumps to approximately 9.9% on the $155,000 down payment—significantly better than most stock market dividends.
Factor in mortgage principal paydown, tax benefits, and potential appreciation, and the total return becomes much more attractive.
Strategic Location Analysis: Why Stewartville Makes Sense
Stewartville’s location drives this investment’s appeal. The town sits at the intersection of Interstate 90, US Highway 63, and Minnesota Highway 30—providing excellent access for businesses and clients.
“We like Stewartville as sort of a secondary location for people that might want something a little bit more inexpensive than having their business inside of Rochester,” Matti said.
The cost differential between Rochester and Stewartville is substantial. Rochester downtown office space commands premium rates while Stewartville offers 30-40% savings with easy commute access.
Rochester’s Destination Medical Center Ripple Effect
Rochester’s Destination Medical Center (DMC) initiative represents a $5.6 billion investment over 20 years. The goal? Position Minnesota as a global health and wellness center.
Mayo Clinic’s DMC-related investment jumped 32% in 2024, reaching $176 million. This massive influx creates demand for supporting professional services—exactly what the Professional Building provides.
Job creation from DMC drives housing and business demand throughout the region. Stewartville captures overflow from professionals seeking lower costs while maintaining Rochester access.
Stewartville’s Recent Economic Momentum
Schumann Business Park attracted major players recently:
- Amazon purchased 23 acres for $2.5 million to build an 83,900-square-foot last-mile delivery facility
- United Therapeutics bought land for a biotech facility focused on pig-to-human organ transplants (completion in 2026)
- Minnesota Medical Technologies more than doubled its existing facility
These industrial developments create demand for professional services. Companies need IT consultants, accountants, lawyers, and healthcare providers—the exact tenant mix in the Professional Building.
Inside the Professional Building: Tenants and Market Position
The Professional Building houses a strategic mix of established businesses:
- Charlie Brown PC Applications Consultants
- 507 Family Chiropractic
- Overby Orthodontics
- Additional professional service providers
This healthcare and technology focus aligns perfectly with Rochester’s medical economy. The 46-year-old building has been updated with modern amenities while maintaining its downtown character.
The Value of Established Tenants
Buying a property with existing tenants provides three critical advantages:
Immediate cash flow eliminates the empty building drain on finances. From day one, rental income covers operating expenses and mortgage payments.
Reduced risk comes from established businesses with track records. These aren’t startups that might fold in six months. They’re community-serving businesses with stable customer bases.
Market validation proves the location works. Previous tenants chose this building for good reasons—visibility, access, and rent levels that support their business models.
Vacancy Strategy and Income Growth Opportunities
The two vacant units represent opportunity, not liability. At approximately 650 square feet each, they’re sized perfectly for solo practitioners or small professional offices.
Target tenant profiles include:
- Medical specialists (aligned with existing healthcare tenants)
- Financial advisors
- Insurance agents
- Consultants serving Rochester businesses
Market rental rates suggest $14-16 per square foot is achievable. Conservative estimates put additional annual income at $18,200-20,800 once filled.
Investment Strategy: The Hayfield Investors’ Proven Approach
Matti and Anderson spent roughly one year researching opportunities before purchasing. Their methodical approach offers lessons for aspiring commercial investors.
Four Key Principles That Guided This Purchase
1. Local Knowledge Matters
They invested where they have personal connections and understanding. Growing up in Hayfield gave them insights into regional economic forces that out-of-state investors miss.
2. Existing Tenants Reduce Risk
Rather than speculating on empty buildings, they bought income-producing property. Cash flow from day one provides margin for error.
3. Regional Economic Thinking
They understood how Rochester’s DMC growth creates opportunities in surrounding communities. This macro-to-micro analysis identified Stewartville as positioned to benefit.
4. Patient Decisiveness
One year of research provided confidence. When they found the right property, they acted quickly and decisively.
Plans for Portfolio Growth
This Professional Building serves as their proof-of-concept. Successful management here builds credibility for larger deals.
Their long-term vision includes:
- Scaling to multi-million dollar properties
- Creating syndication opportunities for other investors
- Using 1031 exchanges for tax-deferred growth
- Building a portfolio of secondary market commercial properties
Tax Advantages That Improve Real Returns
The financial analysis above doesn’t include significant tax benefits that improve actual returns.
Commercial real estate depreciates over 39 years. For this $775,000 building, that means approximately $19,900 in annual depreciation deductions.
This non-cash deduction reduces taxable income from the property. Combined with deductible expenses (mortgage interest, repairs, management fees), the property may show a tax loss while generating positive cash flow.
Depreciation and Cash Flow Benefits
Cost segregation studies can accelerate depreciation on building components. Instead of 39-year straight-line depreciation, certain elements (carpet, fixtures, landscaping) depreciate over 5-15 years.
This creates larger deductions in early years, sheltering more rental income from taxes. The tax-free cash flow significantly improves effective returns.
Real estate investors also benefit from favorable capital gains treatment and potential opportunity zone benefits, depending on location.
Lessons for Commercial Real Estate Investors
This case study offers actionable insights for anyone considering commercial property investment.
Five Actionable Strategies to Replicate
- Target secondary markets near major growth centers like Stewartville benefits from Rochester
- Prioritize properties with existing cash flow over speculative empty buildings
- Evaluate tenant quality and lease terms carefully before purchasing
- Leverage local knowledge and connections to reduce information disadvantages
- Plan 7-10 year holding periods, minimum to capture appreciation and tax benefits
Building Your Commercial Investment Team
Successful commercial investing requires professional support:
- Commercial real estate broker with local market expertise
- Commercial lender offering relationship-based financing
- Real estate attorney for transaction and lease documents
- CPA specializing in real estate for tax strategy optimization
- Property inspector for thorough due diligence
- Insurance agent ensuring proper coverage
Frequently Asked Questions
How much monthly income does the Professional Building generate for Hayfield investors?
Based on six occupied units covering approximately 6,300 square feet at market rates, gross monthly income is estimated at $7,350. After operating expenses of roughly $3,000 monthly, net operating income is approximately $4,350 per month before mortgage payments.
Why did Hayfield investors pay $113,200 more than the county assessment?
County tax assessments often lag market values and don’t reflect income potential. The building generates immediate cash flow from six tenants, has downtown location advantages, and includes upside potential from two vacant units. The previous owner’s $100,000 gain in 13 months validated the higher price.
What financing options did Nick Matti and Trevor Anderson use?
They used a combination of personal funds and commercial loans. Typical commercial mortgages require 20-30% down payments. With an estimated $155,000 down payment and $620,000 financed, they likely secured standard commercial terms with 20-25 year amortization and a 5-10 year balloon payment.
How does Rochester’s Destination Medical Center benefit Stewartville real estate?
The DMC’s $5.6 billion investment over 20 years creates thousands of jobs in Rochester’s medical sector. Mayo Clinic investment increased 32% to $176 million in 2024. This growth drives demand for housing and services in surrounding areas. Stewartville captures overflow due to lower costs while maintaining easy Rochester access.
What are the biggest risks of this investment?
Primary risks include a limited tenant pool in a town of 6,000, economic concentration dependent on Rochester’s success, slower appreciation than urban markets, longer tenant replacement timelines, maintenance needs in a 46-year-old building, and reduced market liquidity if selling becomes necessary. However, local knowledge and existing tenants mitigate these concerns.
Conclusion
The Hayfield investors buy Stewartville commercial building deal demonstrates how strategic thinking turns secondary markets into profitable opportunities. The $775,000 Professional Building purchase works because of location, immediate cash flow, and growth potential tied to Rochester’s economic expansion.
Nick Matti and Trevor Anderson’s approach is replicable. They combined local knowledge, patient research, and decisive action to acquire an income-producing property positioned for long-term success.
This investment balances risk and reward intelligently. Established tenants provide stability while vacant units offer upside. The 46-year-old building requires maintenance attention, but its downtown location and strong tenant mix justify the commitment.
Rochester’s Destination Medical Center creates ripple effects throughout southeastern Minnesota. Stewartville’s position captures overflow demand from businesses seeking lower costs with easy access to Mayo Clinic and related opportunities.
This may be the first of many such deals as investors recognize secondary market potential near major growth centers.
