27240 N 172nd Ave

Surprise, AZ 85387

$325,000D

3 bd · 3.0 ba · 1,885 sqft · Built 2019 · SingleFamily · Pending · 141 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,293/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$268
• HOA: −$100
• Vac / Maint / Mgmt: −$481
• Net cashflow: $-261/mo
• Annual: $-3,132/yr
• Cap rate: 5.33%
• Cash-on-cash: -3.44%
• DSCR: 0.85
• 1% rule: 0.71%
• Cash to close: $91,000

Investor read

• This is a 3-bed/3.0-bath single-family listed at $325k.
• At list price, monthly cash flow is $-261 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $279k (14.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $229k (29.5% below list).
• It's been on market 141 days — a 12% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $229k (29.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#19 in AZ, #4,616 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, employment A-; Watch: health & safety D+, amenities D-, commute F.
• Nadaburg Unified School District (4252) (rural): math 30% / reading 37% proficiency, ranked #90 of 249 in AZ (top 36%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Desert Oasis Elementary School (math 35% / reading 40%, grade F, #434 of 1,109 statewide, top 39%, 572 students, 38% FRL).
• Market conditions: Rents flat; 1327 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals leasing fast (median 7d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 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.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.3% vs local median 3.3% in Surprise — 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.

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 141 days. Have you received any prior offers? Is the seller open to a 29% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.