1219 S Farmer Ave

Tempe, AZ 85281

$1,420,000C+

35 bd · 49.0 ba · 648 sqft · Built 1961 · MultiFamily · Active · 69 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,031/mo
• Mortgage (P&I): −$7,447
• Tax + insurance: −$2,367
• HOA: −$0
• Vac / Maint / Mgmt: −$3,787
• Net cashflow: $4,431/mo
• Annual: $53,174/yr
• Cap rate: 10.04%
• Cash-on-cash: 13.37%
• DSCR: 1.60
• 1% rule: 1.27%
• Cash to close: $397,600

Investor read

• This is a 7 × 5-bed/1-bath units multifamily listed at $1.42M.
• At list price, monthly cash flow is $4k ($53k/yr) — positive. Per door: $633/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $1.42M).
• It's been on market 69 days — a 6% lower offer ($1.33M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.33M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $43k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#10 in AZ, #2,527 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, health & safety D, crime F.
• Tempe School District (4258) (urban): math 17% / reading 29% proficiency, ranked #170 of 249 in AZ (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Holdeman Elementary School (math 4% / reading 18%, grade F, #980 of 1,109 statewide, top 89%, 388 students, 88% FRL); Geneva Epps Mosley Middle School (math 6% / reading 14%, grade F, #188 of 218 statewide, top 88%, 755 students, 72% FRL) — zoned schools average 80% FRL vs 57% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 10% at this address vs 23% district-wide (-12 pts) — the specific schools serving this property underperform the Tempe School District (4258) average; the district grade overstates school quality for this exact location.
• Market conditions: Rents soft (-1.7%/yr); 170 active listings in the ZIP; 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.
• 7 sale attempts since 2y ago; this cycle's ask is 129580% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $1.14M; 25% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• 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.
• Cap rate 10.0% vs local median 3.4% in Tempe — 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.
• At $18,031/mo this rent would consume 335% of the median local household income ($65k/yr) (locally 5992% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 69 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1961 — 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?
• 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.