20343 N Painted Sky Dr

Surprise, AZ 85374

$410,000D

2 bd · 3.0 ba · 2,035 sqft · Built 1997 · SingleFamily · Active · 247 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,038/mo
• Mortgage (P&I): −$2,150
• Tax + insurance: −$376
• HOA: −$160
• Vac / Maint / Mgmt: −$638
• Net cashflow: $-285/mo
• Annual: $-3,426/yr
• Cap rate: 5.46%
• Cash-on-cash: -2.98%
• DSCR: 0.87
• 1% rule: 0.74%
• Cash to close: $114,800

Investor read

• This is a 2-bed/3.0-bath single-family listed at $410k.
• At list price, monthly cash flow is $-285 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $360k (12.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $304k (25.9% below list).
• It's been on market 247 days — a 12% lower offer ($361k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $304k (25.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#19 in AZ, #4,616 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, housing A+, employment A-; Watch: health & safety D+, amenities D-, commute F.
• Dysart Unified District (4243) (suburban): math 34% / reading 40% proficiency, ranked #73 of 249 in AZ (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Kingswood Elementary School (math 29% / reading 33%, grade F, #525 of 1,109 statewide, top 48%, 791 students, 59% FRL); Willow Canyon High School (math 36% / reading 44%, grade F, #70 of 381 statewide, top 18%, 1,787 students, 32% FRL) — zoned schools at 45% FRL track the district average.
• Market conditions: Rents flat; 406 active listings in the ZIP; 16 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 56% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 3 sale attempts since 24y ago; this cycle's ask has dropped $25k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.5% vs local median 3.3% in Surprise — 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.
• This rent runs 45% of the median local income ($81k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 247 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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.
• 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.