1068 Nelson Place Plan

Cottonwood, AZ 86326

$248,558D

3 bd · 2.0 ba · 1,400 sqft · Built — · Manufactured · Active · 186 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,316/mo
• Mortgage (P&I): −$1,303
• Tax + insurance: −$414
• HOA: −$0
• Vac / Maint / Mgmt: −$486
• Net cashflow: $112/mo
• Annual: $1,338/yr
• Cap rate: 6.83%
• Cash-on-cash: 1.92%
• DSCR: 1.09
• 1% rule: 0.93%
• Cash to close: $69,596

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $249k.
• At list price, monthly cash flow is $112 ($1k/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 $232k (6.8% below list).
• It's been on market 186 days — a 12% lower offer ($219k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $219k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#7 in AZ, #2,176 nationally) — a middle-class / working-renter tenant base. Strengths: health & safety A+, commute A, cost of living A; Watch: employment D, amenities F.
• Cottonwood-Oak Creek Elementary District (4487) (town): math 17% / reading 28% proficiency, ranked #174 of 249 in AZ (top 70%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Mountain View Preparatory School (math 30% / reading 44%, grade F, #438 of 1,109 statewide, top 41%, 403 students, 33% FRL); Mingus Union High School (math 22% / reading 27%, grade F, #154 of 381 statewide, top 53%, 1,226 students, 46% FRL).
• Market conditions: Rents soft (-0.2%/yr); 269 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); 2,062 units permitted in Yavapai County in 2024 (98 in 5+ unit buildings).
• Yavapai County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 8→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.8% vs local median 3.9% in Cottonwood — 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.
• At $2,316/mo this rent would consume 48% of the median local household income ($57k/yr) (locally 894% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 186 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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.
• 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.