Desert Willow Plan

Phoenix, AZ 85253

$2,025,200F

4 bd · 4.0 ba · 5,181 sqft · Built — · SingleFamily · Active · 378 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,187/mo
• Mortgage (P&I): −$14,219
• Tax + insurance: −$4,519
• HOA: −$0
• Vac / Maint / Mgmt: −$1,089
• Net cashflow: $-14,640/mo
• Annual: $-175,679/yr
• Cap rate: -0.19%
• Cash-on-cash: -23.14%
• DSCR: -0.03
• 1% rule: 0.19%
• Cash to close: $759,182

Investor read

• This is a 4-bed/4.0-bath single-family listed at $2.03M. Condition is rated poor.
• At list price, monthly cash flow is $-15k ($-176k/yr) — negative.
• To cash-flow at today's rent, offer at most $593k (70.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $519k (74.4% below list).
• It's been on market 378 days — a 12% lower offer ($1.78M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $519k (74.4% below list) — sets the bar for 1% rule.
• In year one you build about $290k of equity ($19k loan paydown + $271k appreciation (10.0% local appreciation)).
• Location reads 75/100 on livability (#16 in AZ, #3,924 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: health & safety C-, crime F.
• Scottsdale Unified District (4240) (urban): math 53% / reading 55% proficiency, ranked #30 of 249 in AZ (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Cheyenne Traditional School (math 78% / reading 75%, grade A, #24 of 1,109 statewide, top 2%, 880 students, 4% FRL); Cocopah Middle School (math 63% / reading 63%, grade B+, #3 of 218 statewide, top 1%, 886 students, 9% FRL); Chaparral High School (math 40% / reading 35%, grade F, #82 of 381 statewide, top 22%, 2,038 students, 6% FRL) — zoned schools average 6% FRL vs 21% district-wide (15 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising fast (+8.6%/yr); 518 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals lingering (median 159d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 85% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 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 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.
• By year 2, paydown + projected appreciation supports a ~$466k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood 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 -0.2% vs local median 3.3% in Phoenix — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 34% of the median local income ($185k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 378 days. Have you received any prior offers? Is the seller open to a 74% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• 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.