50988 Canyon Rd

Morongo Valley, CA 92256

$295,000D+

2 bd · 2.0 ba · 1,310 sqft · Built 1953 · SingleFamily · Active · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,229/mo
• Mortgage (P&I): −$1,547
• Tax + insurance: −$352
• HOA: −$0
• Vac / Maint / Mgmt: −$468
• Net cashflow: $-137/mo
• Annual: $-1,650/yr
• Cap rate: 5.73%
• Cash-on-cash: -2.00%
• DSCR: 0.91
• 1% rule: 0.76%
• Cash to close: $82,600

Investor read

• This is a 2-bed/2.0-bath single-family listed at $295k.
• At list price, monthly cash flow is $-137 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $271k (8.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $223k (24.4% below list).
• It's been on market 83 days — a 6% lower offer ($277k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $223k (24.4% below list) — sets the bar for 1% rule.
• In year one you build about $19k of equity ($2k loan paydown + $17k appreciation (5.6% local appreciation)).
• Location reads 62/100 on livability (#505 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+; Watch: cost of living C-, schools D+, amenities F.
• Morongo Unified (town): math 15% / reading 38% proficiency, ranked #395 of 517 in CA (top 76%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 75 active listings in the ZIP; 5,458 units permitted in San Bernardino County in 2024 (1,500 in 5+ unit buildings).
• San Bernardino County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 9y ago; this cycle's ask has dropped $74k (20%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $198k; 49% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 3, paydown + projected appreciation supports a ~$46k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 8→24/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% vs local median 4.1% in Morongo Valley — 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 83 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• Built in 1953 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.