816 W Calle Chico

Nogales, AZ 85621

$155,000D-

2 bd · 2.0 ba · 888 sqft · Built 1974 · Townhouse · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,072/mo
• Mortgage (P&I): −$813
• Tax + insurance: −$98
• HOA: −$0
• Vac / Maint / Mgmt: −$225
• Net cashflow: $-64/mo
• Annual: $-772/yr
• Cap rate: 5.79%
• Cash-on-cash: -1.78%
• DSCR: 0.92
• 1% rule: 0.69%
• Cash to close: $43,400

Investor read

• This is a 2-bed/2.0-bath townhouse listed at $155k.
• At list price, monthly cash flow is $-64 ($-772/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (7.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $107k (30.8% below list).
• It's been on market 22 days — a 2% lower offer ($153k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $107k (30.8% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($1k loan paydown + $16k appreciation (10.0% local appreciation)).
• Location reads 68/100 on livability (#59 in AZ) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing B; Watch: crime D+, amenities D-, commute F.
• Nogales Unified District (4457) (town): math 12% / reading 23% proficiency, ranked #207 of 249 in AZ (top 83%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Francisco Vasquez De Coronado Elementary School (math 22% / reading 40%, grade F, #525 of 1,109 statewide, top 48%, 515 students, 63% FRL); Desert Shadows Middle School (math 14% / reading 25%, grade F, #134 of 218 statewide, top 63%, 760 students, 75% FRL); Nogales High School (math 13% / reading 19%, grade F, #258 of 381 statewide, top 68%, 1,796 students, 70% FRL).
• Market conditions: 73 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 340 units permitted in Santa Cruz County in 2024 (0 in 5+ unit buildings).
• Santa Cruz County population projected at -22% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 12y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $64k; list at $155k implies a 142% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 3.0% rent growth), your $43k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.8% vs local median 3.4% in Nogales — 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

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Built in 1974 — 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 D-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?
• 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.