1832 N Penasco Dr

Hobbs, NM 88240

$160,000D

3 bd · 1.0 ba · 1,178 sqft · Built 1955 · SingleFamily · Pending · 74 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,516/mo
• Mortgage (P&I): −$839
• Tax + insurance: −$129
• HOA: −$0
• Vac / Maint / Mgmt: −$318
• Net cashflow: $230/mo
• Annual: $2,759/yr
• Cap rate: 8.02%
• Cash-on-cash: 6.16%
• DSCR: 1.27
• 1% rule: 0.95%
• Cash to close: $44,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $160k.
• At list price, monthly cash flow is $230 ($3k/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 $152k (5.2% below list).
• It's been on market 74 days — a 6% lower offer ($150k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $150k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#37 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, crime F, commute F.
• Hobbs Municipal Schools (town): math 17% / reading 31% proficiency, ranked #45 of 95 in NM (top 47%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Taylor Elementary (421 students, 100% FRL); Highland Middle School (840 students, 100% FRL); Hobbs High (math 22% / reading 52%, grade F, #70 of 110 statewide, top 63%, 2,216 students, 100% FRL) — zoned schools average 100% FRL vs 52% district-wide (48 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 37% at this address vs 24% district-wide (+13 pts) — the actual schools serving this property are materially stronger than the Hobbs Municipal Schools average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 235 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 172 units permitted in Lea County in 2024 (0 in 5+ unit buildings).
• Lea County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 10y 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.
• Climate carrying-cost: moderate flood risk; severe wildfire risk; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 74 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1955 — 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 F 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.