1010 S 5th St

Lovington, NM 88260

$55,000B

2 bd · 1.0 ba · 720 sqft · Built 1972 · SingleFamily · Pending · 242 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,257/mo
• Mortgage (P&I): −$288
• Tax + insurance: −$92
• HOA: −$0
• Vac / Maint / Mgmt: −$264
• Net cashflow: $613/mo
• Annual: $7,354/yr
• Cap rate: 19.66%
• Cash-on-cash: 47.75%
• DSCR: 3.12
• 1% rule: 2.29%
• Cash to close: $15,400

Investor read

• This is a 2-bed/1.0-bath single-family listed at $55k.
• At list price, monthly cash flow is $613 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $55k).
• It's been on market 242 days — a 12% lower offer ($48k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $48k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $380 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#33 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: crime F, amenities F, commute F.
• Zoned schools: Llano Elementary (325 students, 99% FRL); Taylor Middle (527 students, 99% FRL); Lovington High (math 44% / reading 54%, grade D, #51 of 110 statewide, top 50%, 737 students, 100% FRL).
• Market conditions: 72 active listings in the ZIP; 172 units permitted in Lea County in 2024 (0 in 5+ unit buildings).
• Lea County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $25k (31%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 242 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?
• 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.