65812 Acoma Ave

Desert Hot Springs, CA 92240

$225,000D

2 bd · 1.0 ba · 1,200 sqft · Built 1959 · Other · Active · 198 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,076/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$386
• HOA: −$0
• Vac / Maint / Mgmt: −$436
• Net cashflow: $75/mo
• Annual: $898/yr
• Cap rate: 6.69%
• Cash-on-cash: 1.43%
• DSCR: 1.06
• 1% rule: 0.92%
• Cash to close: $63,000

Investor read

• This is a 2-bed/1.0-bath other listed at $225k.
• At list price, monthly cash flow is $75 ($898/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 $208k (7.7% below list).
• It's been on market 198 days — a 12% lower offer ($198k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $198k (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 49/100 on livability (#1,149 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing B+; Watch: crime D+, schools F, amenities F.
• Palm Springs Unified (suburban): math 21% / reading 42% proficiency, ranked #328 of 517 in CA (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.7%/yr); 515 active listings in the ZIP; 34 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 59% of comp listings sitting > 30 days — soft ceiling on asking rent; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 16y ago; this cycle's ask has dropped $50k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $169k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.7% vs local median 4.0% in Desert Hot Springs — 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 $2,076/mo this rent would consume 46% of the median local household income ($54k/yr) (locally 2095% 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 198 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1959 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.