5 Road 5457

Lee Acres, NM 87401

$85,000B-

2 bd · 1.0 ba · 784 sqft · Built 1982 · Other · Pending · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,100/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$58
• HOA: −$0
• Vac / Maint / Mgmt: −$231
• Net cashflow: $365/mo
• Annual: $4,384/yr
• Cap rate: 11.45%
• Cash-on-cash: 18.42%
• DSCR: 1.82
• 1% rule: 1.29%
• Cash to close: $23,800

Investor read

• This is a 2-bed/1.0-bath other listed at $85k.
• At list price, monthly cash flow is $365 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $85k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 53/100 on livability (#249 in NM) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A+; Watch: employment D, crime F, amenities F.
• Farmington Municipal Schools (urban): math 23% / reading 43% proficiency, ranked #23 of 95 in NM (top 24%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Bluffview Elementary (371 students, 100% FRL); Mesa View Middle School (488 students, 100% FRL); Piedra Vista High (math 27% / reading 52%, grade F, #68 of 110 statewide, top 62%, 1,578 students, 47% FRL) — zoned schools average 82% FRL vs 48% district-wide (35 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising fast (+5.1%/yr); 246 active listings in the ZIP; 78 units permitted in San Juan County in 2024 (8 in 5+ unit buildings).
• San Juan County population projected at -51% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 3y ago 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.
• At projected returns (-3.0% appreciation + 5.1% rent growth), your $24k cash investment doubles in ~6 years — after that, you're playing with house money.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.