1002 N Chalet Cir

Payson, AZ 85541

$199,000D-

2 bd · 1.0 ba · 672 sqft · Built 1971 · Manufactured · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,506/mo
• Mortgage (P&I): −$1,044
• Tax + insurance: −$132
• HOA: −$0
• Vac / Maint / Mgmt: −$316
• Net cashflow: $15/mo
• Annual: $174/yr
• Cap rate: 6.38%
• Cash-on-cash: 0.31%
• DSCR: 1.01
• 1% rule: 0.76%
• Cash to close: $55,720

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $199k.
• At list price, monthly cash flow is $15 ($174/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $151k (24.3% below list).
• It's been on market 70 days — a 6% lower offer ($187k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $151k (24.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#44 in AZ) — a middle-class / working-renter tenant base. Strengths: housing A, crime B, cost of living B; Watch: schools C-, amenities D-, commute F.
• Payson Unified District (4209) (town): math 20% / reading 32% proficiency, ranked #138 of 249 in AZ (top 55%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 695 active listings in the ZIP; 217 units permitted in Gila County in 2024 (0 in 5+ unit buildings).
• Gila County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $40k; list at $199k implies a 398% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 3.3% in Payson — 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

• It's been on market 70 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• Built in 1971 — 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.
• 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.
• 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.