585 #40 N Sleepy Hollow Ln

Tonto Basin, AZ 85553

$48,500B+

1 bd · 1.0 ba · 500 sqft · Built 1998 · SingleFamily · Active · 120 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $791/mo
• Mortgage (P&I): −$254
• Tax + insurance: −$81
• HOA: −$0
• Vac / Maint / Mgmt: −$166
• Net cashflow: $290/mo
• Annual: $3,476/yr
• Cap rate: 13.46%
• Cash-on-cash: 25.60%
• DSCR: 2.14
• 1% rule: 1.63%
• Cash to close: $13,580

Investor read

• This is a 1-bed/1.0-bath single-family listed at $48k. Condition is rated fair.
• At list price, monthly cash flow is $290 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($791 rent vs $48k).
• It's been on market 120 days — a 9% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (9.0% below list) — sets the bar for market timing.
• In year one you build about $921 of equity ($335 loan paydown + $586 appreciation (1.2% local appreciation)).
• Location reads 59/100 on livability (#201 in AZ) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, crime A, housing A-; Watch: employment D, amenities F, commute F.
• Tonto Basin Elementary District (4215) (rural): math 50% / reading 50% proficiency, ranked #143 of 501 in AZ (top 28%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 64% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 60 active listings in the ZIP; 217 units permitted in Gila County in 2024 (0 in 5+ unit buildings).
• Gila County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• At projected returns (1.2% appreciation + 3.0% rent growth), your $14k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; major wildfire risk; extreme-heat days projected 5→13/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.5% vs local median 1.4% in Tonto Basin — 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 120 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• 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?
• 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.

Repairs flagged (vision-AI assessment)

• Moderate: kitchen cabinets — dated and in need of updating
• Moderate: bathroom vanity — dated and in need of updating
• Major: landscaping — overgrown vegetation needs trimming