74262 El Paseo Dr

Twentynine Palms, CA 92277

$165,000D

2 bd · 1.0 ba · 942 sqft · Built 1948 · SingleFamily · Active · 160 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,367/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$697
• HOA: −$0
• Vac / Maint / Mgmt: −$287
• Net cashflow: $-482/mo
• Annual: $-5,782/yr
• Cap rate: 5.89%
• Cash-on-cash: -1.44%
• DSCR: 0.94
• 1% rule: 0.83%
• Cash to close: $46,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $-482 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $80k (51.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $137k (17.1% below list).
• It's been on market 160 days — a 12% lower offer ($145k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $80k (51.6% below list) — sets the bar for cash-flow.
• 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 59/100 on livability (#622 in CA) — a working-class tenant base; expect higher turnover. Strengths: commute A+, housing A+; Watch: schools D, amenities F, employment D-.
• Morongo Unified (town): math 15% / reading 38% proficiency, ranked #395 of 517 in CA (top 76%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $427/mo; built in 1948 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.5%/yr); 734 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 5,458 units permitted in San Bernardino County in 2024 (1,500 in 5+ unit buildings).
• San Bernardino County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $35k (18%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.9% vs local median 4.1% in Twentynine Palms — 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?
• It's been on market 160 days. Have you received any prior offers? Is the seller open to a 52% concession, seller financing, or rate buy-down credit?
• Built in 1948 — 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?
• 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 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?
• 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?