5525 E Thomas Rd

Phoenix, AZ 85018

$219,990F

2 bd · 1.0 ba · 848 sqft · Built 1974 · Condo · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,837/mo
• Mortgage (P&I): −$1,154
• Tax + insurance: −$140
• HOA: −$341
• Vac / Maint / Mgmt: −$386
• Net cashflow: $-184/mo
• Annual: $-2,204/yr
• Cap rate: 5.29%
• Cash-on-cash: -3.58%
• DSCR: 0.84
• 1% rule: 0.83%
• Cash to close: $61,597

Investor read

• This is a 2-bed/1.0-bath condo listed at $220k.
• At list price, monthly cash flow is $-184 ($-2k/yr) — negative.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $184k (16.5% below list).
• It's been on market 17 days — a 2% lower offer ($217k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $184k (16.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#16 in AZ, #3,924 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: health & safety C-, crime F.
• Phoenix Union High School District (4286) (urban): math 10% / reading 15% proficiency, ranked #224 of 249 in AZ (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Griffith Elementary School (math 6% / reading 16%, grade F, #980 of 1,109 statewide, top 89%, 489 students, 85% FRL); Pat Tillman Middle School (math 5% / reading 15%, grade F, #188 of 218 statewide, top 88%, 652 students, 100% FRL); Camelback High School (math 6% / reading 7%, grade F, #363 of 381 statewide, top 95%, 2,238 students, 86% FRL).
• Market conditions: Rents flat; 383 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 sale attempts since 26y 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.
• Current owner paid $163k; 35% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.3% vs local median 3.3% in Phoenix — 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?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.