18616 W Desert Hollow Dr

Surprise, AZ 85361

$350,000D-

3 bd · 2.0 ba · 1,706 sqft · Built 2024 · SingleFamily · Active · 51 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,981/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$272
• HOA: −$100
• Vac / Maint / Mgmt: −$416
• Net cashflow: $-643/mo
• Annual: $-7,716/yr
• Cap rate: 4.09%
• Cash-on-cash: -7.87%
• DSCR: 0.65
• 1% rule: 0.57%
• Cash to close: $98,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $350k.
• At list price, monthly cash flow is $-643 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $236k (32.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $198k (43.4% below list).
• It's been on market 51 days — a 3% lower offer ($340k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $198k (43.4% below list) — sets the bar for 1% rule.
• In year one you build about $37k of equity ($2k loan paydown + $35k appreciation (10.0% local appreciation)).
• Location reads 74/100 on livability (#19 in AZ, #4,616 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, employment A-; Watch: health & safety D+, amenities D-, commute F.
• Dysart Unified District (4243) (suburban): math 34% / reading 40% proficiency, ranked #73 of 249 in AZ (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Asante Preparatory Academy (math 29% / reading 43%, grade F, #456 of 1,109 statewide, top 41%, 1,004 students, 33% FRL); Willow Canyon High School (math 36% / reading 44%, grade F, #70 of 381 statewide, top 18%, 1,787 students, 32% FRL).
• Market conditions: 373 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y ago; this cycle's ask has dropped $45k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 2, paydown + projected appreciation supports a ~$60k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.1% vs local median 3.3% in Surprise — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.

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 51 days. Have you received any prior offers? Is the seller open to a 43% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.