39685 Saint Michael

Palm Desert, CA 92211

$729,900F

4 bd · 3.5 ba · 2,793 sqft · Built 1988 · SingleFamily · Active · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,687/mo
• Mortgage (P&I): −$3,828
• Tax + insurance: −$967
• HOA: −$278
• Vac / Maint / Mgmt: −$984
• Net cashflow: $-1,370/mo
• Annual: $-16,436/yr
• Cap rate: 4.04%
• Cash-on-cash: -8.04%
• DSCR: 0.64
• 1% rule: 0.64%
• Cash to close: $204,372

Investor read

• This is a 4-bed/3.5-bath single-family listed at $730k.
• At list price, monthly cash flow is $-1k ($-16k/yr) — negative.
• To cash-flow at today's rent, offer at most $488k (33.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $469k (35.8% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $469k (35.8% 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 $22k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,050 in CA) — a working-class tenant base; expect higher turnover. Strengths: schools A-, employment B+, housing B; Watch: crime D, amenities F, commute F.
• Desert Sands Unified (suburban): math 31% / reading 56% proficiency, ranked #199 of 517 in CA (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents soft (-0.3%/yr); 635 active listings in the ZIP; 34 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 12 sale attempts since 25y 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 $475k; list at $730k implies a 54% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $4,687/mo this rent would consume 64% of the median local household income ($88k/yr) (locally 1181% 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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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?
• 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.
• 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.