505 W 10th St

Walsenburg, CO 81089

$39,999B-

2 bd · 1.0 ba · 1,320 sqft · Built 1923 · SingleFamily · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,090/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$484
• HOA: −$0
• Vac / Maint / Mgmt: −$229
• Net cashflow: $167/mo
• Annual: $2,002/yr
• Cap rate: 24.10%
• Cash-on-cash: 63.58%
• DSCR: 3.83
• 1% rule: 2.72%
• Cash to close: $11,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $40k.
• At list price, monthly cash flow is $167 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 15 days — a 2% lower offer ($39k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $39k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#80 in CO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: amenities F, commute F, employment F.
• Huerfano School District Re-1 (town): math 9% / reading 24% proficiency, ranked #163 of 176 in CO (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Peakview School (math 5% / reading 17%, grade F, #879 of 966 statewide, top 94%, 244 students, 84% FRL); John Mall Jr/Sr High School (math 24% / reading 24%, grade F, #266 of 381 statewide, top 79%, 171 students, 81% FRL).
• Watch-outs: flood insurance adds $427/mo; built in 1923 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 360 active listings in the ZIP; 51 units permitted in Huerfano County in 2024 (0 in 5+ unit buildings).
• Huerfano County population projected at -36% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 15 sale attempts since 4y ago; this cycle's ask has dropped $10k (20%) 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 $11k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 24.1% vs local median 1.7% in Walsenburg — 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

• Built in 1923 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.