3728 S Towner Ave

Naco, AZ 85620

$145,000D

3 bd · 2.0 ba · 1,236 sqft · Built 1900 · SingleFamily · Active · 262 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,176/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$173
• HOA: −$0
• Vac / Maint / Mgmt: −$247
• Net cashflow: $-4/mo
• Annual: $-45/yr
• Cap rate: 6.26%
• Cash-on-cash: -0.11%
• DSCR: 1.00
• 1% rule: 0.81%
• Cash to close: $40,600

Investor read

• This is a 3-bed/2.0-bath single-family listed at $145k.
• At list price, monthly cash flow is $-4 ($-45/yr) — negative.
• To cash-flow at today's rent, offer at most $144k (0.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $118k (18.9% below list).
• It's been on market 262 days — a 12% lower offer ($128k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $118k (18.9% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($1k loan paydown + $4k appreciation (3.0% local appreciation)).
• Location reads 53/100 on livability (#287 in AZ) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, crime B+; Watch: amenities F, commute F, employment D-.
• Naco Elementary District (4176) (rural): math 14% / reading 13% proficiency, ranked #411 of 501 in AZ (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Naco Elementary School (math 2% / reading 12%, grade F, #1,064 of 1,109 statewide, top 97%, 276 students, 89% FRL).
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 4 active listings in the ZIP; 437 units permitted in Cochise County in 2024 (6 in 5+ unit buildings).
• Cochise County population projected at -30% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 4y ago; this cycle's ask has dropped $18k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (3.0% appreciation + 3.0% rent growth), your $41k cash investment doubles in ~7 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 262 days. Have you received any prior offers? Is the seller open to a 19% concession, seller financing, or rate buy-down credit?
• Built in 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.