916 Butternut St

Carlsbad, NM 88220

$223,000C

4 bd · 2.0 ba · 1,795 sqft · Built 2019 · SingleFamily · Active · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,278/mo
• Mortgage (P&I): −$1,169
• Tax + insurance: −$258
• HOA: −$0
• Vac / Maint / Mgmt: −$478
• Net cashflow: $372/mo
• Annual: $4,470/yr
• Cap rate: 8.30%
• Cash-on-cash: 7.16%
• DSCR: 1.32
• 1% rule: 1.02%
• Cash to close: $62,440

Investor read

• This is a 4-bed/2.0-bath single-family listed at $223k.
• At list price, monthly cash flow is $372 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $223k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• 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 70/100 on livability (#20 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment A; Watch: commute C-, health & safety C-, crime F.
• Zoned schools: Early Childhood Education Center (170 students, 25% FRL); Carlsbad Sixth Grade Academy - Alta Vista Campus (705 students, 44% FRL); Carlsbad High (1,551 students, 27% FRL).
• Market conditions: 363 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 156 units permitted in Eddy County in 2024 (0 in 5+ unit buildings).
• Eddy County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 7y 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: severe wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 35% of the median local income ($78k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• 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 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?
• 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.