67937 Rio Pecos Dr

Cathedral City, CA 92234

$399,000D

2 bd · 2.0 ba · 1,185 sqft · Built 2022 · SingleFamily · Pending · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,543/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$743
• HOA: −$210
• Vac / Maint / Mgmt: −$744
• Net cashflow: $-247/mo
• Annual: $-2,964/yr
• Cap rate: 5.93%
• Cash-on-cash: -1.31%
• DSCR: 0.94
• 1% rule: 0.89%
• Cash to close: $111,720

Investor read

• This is a 2-bed/2.0-bath single-family listed at $399k.
• At list price, monthly cash flow is $-247 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $355k (10.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $354k (11.2% below list).
• It's been on market 33 days — a 3% lower offer ($387k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $354k (11.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#344 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, housing B+; Watch: employment D+, amenities D-, cost of living F.
• Palm Springs Unified (suburban): math 21% / reading 42% proficiency, ranked #328 of 517 in CA (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Rio Vista Elementary (690 students, 96% FRL); James Workman Middle (1,028 students, 99% FRL); Cathedral City High (math 25% / reading 61%, grade F, #460 of 1,170 statewide, top 40%, 1,395 students, 98% FRL) — zoned schools average 98% FRL vs 73% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $125/mo.
• Market conditions: Rents rising (+3.2%/yr); 533 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 47d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 70% of comp listings sitting > 30 days — soft ceiling on asking rent; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: in FEMA flood zone A (mandatory federal flood insurance); extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $3,543/mo this rent would consume 58% of the median local household income ($74k/yr) (locally 1682% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 33 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.