747 E Germann Rd #121

San Tan Valley, AZ 85140

$40,000B-

2 bd · 1.0 ba · 800 sqft · Built 1972 · SingleFamily · Active · 86 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,648/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$67
• HOA: −$0
• Vac / Maint / Mgmt: −$346
• Net cashflow: $1,025/mo
• Annual: $12,305/yr
• Cap rate: 37.06%
• Cash-on-cash: 109.87%
• DSCR: 5.89
• 1% rule: 4.12%
• Cash to close: $11,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $40k. Condition is rated good.
• At list price, monthly cash flow is $1k ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $40k).
• It's been on market 86 days — a 6% lower offer ($38k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $38k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $277 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 54/100 on livability (#282 in AZ) — a working-class tenant base; expect higher turnover. Strengths: housing A+, employment B+; Watch: crime D+, amenities F, commute F.
• J O Combs Unified School District (4445) (rural): math 27% / reading 30% proficiency, ranked #109 of 249 in AZ (top 44%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Jack Harmon Elementary School (math 24% / reading 32%, grade F, #586 of 1,109 statewide, top 53%, 425 students, 56% FRL); Combs Center For Success Middle School (1 students, 0% FRL); Combs High School (math 25% / reading 31%, grade F, #136 of 381 statewide, top 36%, 1,356 students, 37% FRL) — zoned schools at 31% FRL track the district average.
• Market conditions: Rents rising (+1.7%/yr); 823 active listings in the ZIP; solid renter incomes; 9,504 units permitted in Pinal County in 2024 (776 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 1.7% rent growth), your $11k cash investment doubles in ~1 year — after that, you're playing with house money.
• Cap rate 37.1% vs local median 3.2% in San Tan 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

• It's been on market 86 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1972 — 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?
• Crime grade is D 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?
• 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.