Desert Willow Plan

Phoenix, AZ 85253

$2,025,200F

4 bd · 4.0 ba · 5,181 sqft · Built — · SingleFamily · Active · 238 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,693/mo
• Mortgage (P&I): −$13,475
• Tax + insurance: −$4,283
• HOA: −$0
• Vac / Maint / Mgmt: −$986
• Net cashflow: $-14,050/mo
• Annual: $-168,598/yr
• Cap rate: -0.27%
• Cash-on-cash: -23.43%
• DSCR: -0.04
• 1% rule: 0.18%
• Cash to close: $719,463

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 $-14k ($-169k/yr) — negative.
• To cash-flow at today's rent, offer at most $536k (73.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $469k (76.8% below list).
• It's been on market 238 days — a 12% lower offer ($1.78M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $469k (76.8% below list) — sets the bar for 1% rule.
• In year one you build about $275k of equity ($18k loan paydown + $257k 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.
• Market conditions: Rents rising fast (+8.6%/yr); 354 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 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 ~$442k 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 -0.3% 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 30% 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 238 days. Have you received any prior offers? Is the seller open to a 77% 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.