3277 Frying Pan Rd

Borrego Springs, CA 92004

$443,000C-

3 bd · 2.0 ba · 1,578 sqft · Built 2006 · SingleFamily · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,000/mo
• Mortgage (P&I): −$2,323
• Tax + insurance: −$687
• HOA: −$0
• Vac / Maint / Mgmt: −$1,050
• Net cashflow: $940/mo
• Annual: $11,279/yr
• Cap rate: 9.17%
• Cash-on-cash: 10.28%
• DSCR: 1.46
• 1% rule: 1.13%
• Cash to close: $124,040

Investor read

• This is a 3-bed/2.0-bath single-family listed at $443k.
• At list price, monthly cash flow is $940 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $443k).
• It's been on market 31 days — a 3% lower offer ($430k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $430k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 58/100 on livability (#712 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+, housing A+; Watch: schools F, amenities F, commute F.
• Borrego Springs Unified (rural): math 20% / reading 35% proficiency, ranked #1,120 of 1,400 in CA (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $122/mo.
• Market conditions: 174 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 7 sale attempts since 20y 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.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance); extreme-heat days projected 10→31/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 6.0% in Borrego Springs — 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 31 days. Have you received any prior offers? Is the seller open to a 3% 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?
• 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.