Plan 2 Plan

Sterling Ranch, CO 80125

$599,900D

6 bd · 5.0 ba · 1,882 sqft · Built — · MultiFamily · Active · 54 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,286/mo
• Mortgage (P&I): −$3,146
• Tax + insurance: −$1,000
• HOA: −$0
• Vac / Maint / Mgmt: −$1,110
• Net cashflow: $30/mo
• Annual: $362/yr
• Cap rate: 6.35%
• Cash-on-cash: 0.22%
• DSCR: 1.01
• 1% rule: 0.88%
• Cash to close: $167,972

Investor read

• This is a 2 × 3.0-bed/2.5-bath units multifamily listed at $600k. Condition is rated good.
• At list price, monthly cash flow is $30 ($362/yr) — positive. Per door: $15/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $529k (11.9% below list).
• It's been on market 54 days — a 3% lower offer ($582k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $529k (11.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Douglas County School District No. RE-1 (suburban): math 45% / reading 62% proficiency, ranked #7 of 86 in CO (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Market conditions: Rents falling (-3.0%/yr); 357 active listings in the ZIP; high-income renter base; 3,131 units permitted in Douglas County in 2024 (950 in 5+ unit buildings).
• Douglas County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.4% vs local median 2.1% in Sterling Ranch — 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.
• This rent runs 35% of the median local income ($180k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 54 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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.