21 Colonial

Rancho Mirage, CA 92270

$699,000D

4 bd · 4.0 ba · 2,644 sqft · Built 1989 · Condo · Active · 16 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,474/mo
• Mortgage (P&I): −$3,666
• Tax + insurance: −$816
• HOA: −$900
• Vac / Maint / Mgmt: −$1,360
• Net cashflow: $-267/mo
• Annual: $-3,206/yr
• Cap rate: 5.83%
• Cash-on-cash: -1.64%
• DSCR: 0.93
• 1% rule: 0.93%
• Cash to close: $195,720

Investor read

• This is a 4-bed/4.0-bath condo listed at $699k.
• At list price, monthly cash flow is $-267 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $652k (6.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $647k (7.4% below list).
• It's been on market 16 days — a 2% lower offer ($689k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $647k (7.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,065 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+; Watch: amenities F, commute F, cost of living 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.
• Market conditions: Rents rising (+3.7%/yr); 532 active listings in the ZIP; 35 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 6 sale attempts since 26y 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 $325k; list at $699k implies a 115% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 4→12/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% vs local median 3.0% in Rancho Mirage — 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 $6,474/mo this rent would consume 72% of the median local household income ($107k/yr) (locally 498% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.