Plan 2 | The Celano Plan

Palm Desert, CA 92260

$600,990F

3 bd · 3.0 ba · 2,249 sqft · Built — · SingleFamily · Active · 1004 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,970/mo
• Mortgage (P&I): −$3,781
• Tax + insurance: −$1,202
• HOA: −$0
• Vac / Maint / Mgmt: −$834
• Net cashflow: $-1,846/mo
• Annual: $-22,155/yr
• Cap rate: 3.22%
• Cash-on-cash: -10.97%
• DSCR: 0.51
• 1% rule: 0.55%
• Cash to close: $201,883

Investor read

• This is a 3-bed/3.0-bath single-family listed at $601k. Condition is rated fair.
• At list price, monthly cash flow is $-2k ($-22k/yr) — negative.
• To cash-flow at today's rent, offer at most $454k (24.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $397k (33.9% below list).
• It's been on market 1004 days — a 12% lower offer ($529k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $397k (33.9% 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: 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.
• Zoned schools: James Earl Carter Elementary (516 students, 53% FRL); Colonel Mitchell Paige Middle (math 10% / reading 10%, grade F, #474 of 498 statewide, top 99%, 436 students, 74% FRL); Palm Desert High (math 42% / reading 67%, grade C-, #256 of 1,170 statewide, top 24%, 2,050 students, 57% FRL).
• Market conditions: Rents rising (+1.6%/yr); 621 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 68d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 65% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $3,970/mo this rent would consume 68% of the median local household income ($70k/yr) (locally 17% 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 1004 days. Have you received any prior offers? Is the seller open to a 34% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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?
• 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?

Repairs flagged (vision-AI assessment)

• Moderate: Exterior siding — Visible discoloration and wear
• Moderate: Interior walls — Paint appears worn