3462 Highland Dr

Heber-Overgaard, AZ 85928

$448,900D-

4 bd · 2.0 ba · 1,864 sqft · Built 1999 · SingleFamily · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,381/mo
• Mortgage (P&I): −$2,354
• Tax + insurance: −$302
• HOA: −$5
• Vac / Maint / Mgmt: −$500
• Net cashflow: $-781/mo
• Annual: $-9,367/yr
• Cap rate: 4.21%
• Cash-on-cash: -7.45%
• DSCR: 0.67
• 1% rule: 0.53%
• Cash to close: $125,692

Investor read

• This is a 4-bed/2.0-bath single-family listed at $449k.
• At list price, monthly cash flow is $-781 ($-9k/yr) — negative.
• To cash-flow at today's rent, offer at most $311k (30.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $238k (47.0% below list).
• It's been on market 34 days — a 3% lower offer ($435k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $238k (47.0% below list) — sets the bar for 1% rule.
• In year one you build about $7k of equity ($3k loan paydown + $4k appreciation (0.9% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Heber-Overgaard Unified District (4392) (rural): math 52% / reading 45% proficiency, ranked #51 of 249 in AZ (top 20%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mountain Meadows Primary (math 70% / reading 50%, grade B-, #148 of 1,109 statewide, top 15%, 143 students, 43% FRL); Mogollon Jr High School (math 42% / reading 32%, grade F, #57 of 218 statewide, top 27%, 77 students, 0% FRL); Mogollon High School (math 30% / reading 30%, grade F, #116 of 381 statewide, top 31%, 167 students, 32% FRL) — zoned schools average 25% FRL vs 50% district-wide (25 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 157 active listings in the ZIP; 485 units permitted in Navajo County in 2024 (11 in 5+ unit buildings).
• Navajo County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $188k; list at $449k implies a 139% gain — meaningful room to come down on a strong offer.
• By year 5, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.2% vs local median 3.2% in Heber-Overgaard — 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.

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 34 days. Have you received any prior offers? Is the seller open to a 47% 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.