3655 El Morro Rd

Colorado Springs, CO 80910

$110,000D

3 bd · 2.0 ba · 4,308 sqft · Built 1991 · Land · Active · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,845/mo
• Mortgage (P&I): −$577
• Tax + insurance: −$183
• HOA: −$765
• Vac / Maint / Mgmt: −$387
• Net cashflow: $-68/mo
• Annual: $-812/yr
• Cap rate: 5.55%
• Cash-on-cash: -2.64%
• DSCR: 0.88
• 1% rule: 1.68%
• Cash to close: $30,800

Investor read

• This is a 3-bed/2.0-bath land listed at $110k.
• At list price, monthly cash flow is $-68 ($-812/yr) — negative.
• To cash-flow at today's rent, offer at most $100k (8.9% below list).
• Meets the 1% rule at list price ($2k rent vs $110k).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $100k (8.9% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $761 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#23 in CO, #2,639 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, housing A+, health & safety A+; Watch: cost of living C-, crime F.
• Harrison School District No. 2 In The County Of El Paso An (urban): math 16% / reading 35% proficiency, ranked #67 of 86 in CO (top 78%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Centennial Elementary School (math 12% / reading 17%, grade F, #813 of 966 statewide, top 85%, 346 students, 73% FRL); Sierra High School (math 8% / reading 42%, grade F, #264 of 381 statewide, top 69%, 908 students, 54% FRL) — zoned schools at 63% FRL track the district average.
• Watch-outs: HOA is 41% of rent.
• Market conditions: Rents soft (-1.5%/yr); 183 active listings in the ZIP; 3,906 units permitted in El Paso County in 2024 (872 in 5+ unit buildings).
• El Paso County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $70k (39%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $78k; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 5.6% vs local median 3.3% in Colorado Springs — 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 36% of the median local income ($62k/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?
• 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 B-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 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?
• 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.