1206 E Sixteenth St

Alamogordo, NM 88310

$115,000B

3 bd · 1.0 ba · 1,304 sqft · Built 1955 · SingleFamily · Pending · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,591/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$276
• HOA: −$0
• Vac / Maint / Mgmt: −$334
• Net cashflow: $378/mo
• Annual: $4,535/yr
• Cap rate: 11.82%
• Cash-on-cash: 19.75%
• DSCR: 1.88
• 1% rule: 1.38%
• Cash to close: $32,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $115k.
• At list price, monthly cash flow is $378 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $115k).
• It's been on market 42 days — a 3% lower offer ($112k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $112k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $795 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#5 in NM, #3,233 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime D, employment D, schools F.
• Alamogordo Public Schools (town): math 26% / reading 39% proficiency, ranked #26 of 95 in NM (top 27%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $152/mo; built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.6%/yr); 444 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 6 units permitted in Otero County in 2024 (0 in 5+ unit buildings).
• Otero County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $24k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 1.6% rent growth), your $32k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AH (mandatory federal flood insurance); extreme-heat days projected 7→25/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 33% of the median local income ($57k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 42 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• 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.