6535 E Lone Mountain Rd N

Cave Creek, AZ 85331

$699,000D

3 bd · 3.0 ba · 2,138 sqft · Built 1969 · SingleFamily · Pending · 107 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,215/mo
• Mortgage (P&I): −$3,666
• Tax + insurance: −$1,165
• HOA: −$0
• Vac / Maint / Mgmt: −$1,095
• Net cashflow: $-711/mo
• Annual: $-8,533/yr
• Cap rate: 5.07%
• Cash-on-cash: -4.36%
• DSCR: 0.81
• 1% rule: 0.75%
• Cash to close: $195,720

Investor read

• This is a 3-bed/3.0-bath single-family listed at $699k.
• At list price, monthly cash flow is $-711 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $596k (14.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $521k (25.4% below list).
• It's been on market 107 days — a 9% lower offer ($636k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $521k (25.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 50/100 on livability (#325 in AZ) — a working-class tenant base; expect higher turnover. Strengths: schools A, crime A, housing B; Watch: amenities F, commute F, employment F.
• Cave Creek Unified District (4244) (urban): math 57% / reading 59% proficiency, ranked #13 of 249 in AZ (top 5%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Market conditions: 396 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 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.
• 2 sale attempts; this cycle's ask has dropped $201k (22%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $180k; list at $699k implies a 288% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.1% vs local median 1.5% in Cave Creek — 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.
• At $5,215/mo this rent would consume 48% of the median local household income ($129k/yr) (locally 169% 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 107 days. Have you received any prior offers? Is the seller open to a 25% concession, seller financing, or rate buy-down credit?
• Built in 1969 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.