407 Phelps Cir

Cloudcroft, NM 88317

$193,000D

1 bd · 1.0 ba · 444 sqft · Built 1960 · SingleFamily · Active · 168 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,552/mo
• Mortgage (P&I): −$1,012
• Tax + insurance: −$132
• HOA: −$0
• Vac / Maint / Mgmt: −$326
• Net cashflow: $83/mo
• Annual: $992/yr
• Cap rate: 6.81%
• Cash-on-cash: 1.83%
• DSCR: 1.08
• 1% rule: 0.80%
• Cash to close: $54,040

Investor read

• This is a 1-bed/1.0-bath single-family listed at $193k.
• At list price, monthly cash flow is $83 ($992/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $155k (19.6% below list).
• It's been on market 168 days — a 12% lower offer ($170k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $155k (19.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#107 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+; Watch: health & safety C-, crime F, amenities F.
• Cloudcroft Municipal Schools (rural): math 28% / reading 48% proficiency, ranked #12 of 95 in NM (top 13%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Cloudcroft Elementary (math 32% / reading 82%, grade C+, #14 of 68 statewide, top 19%, 165 students, 47% FRL); Cloudcroft Middle (math 22% / reading 62%, grade D-, #5 of 27 statewide, top 15%, 101 students, 43% FRL); Cloudcroft High (math 30% / reading 70%, grade D+, #36 of 110 statewide, top 45%, 113 students, 45% FRL).
• Market conditions: 154 active listings in the ZIP; 6 units permitted in Otero County in 2024 (0 in 5+ unit buildings).
• Otero County population projected to shrink 7% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 168 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1960 — 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.
• 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.