400 W Midwest St

Hobbs, NM 88240

$124,500D+

2 bd · 1.0 ba · 852 sqft · Built 1950 · SingleFamily · Pending · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,175/mo
• Mortgage (P&I): −$653
• Tax + insurance: −$249
• HOA: −$0
• Vac / Maint / Mgmt: −$247
• Net cashflow: $26/mo
• Annual: $310/yr
• Cap rate: 7.72%
• Cash-on-cash: 5.10%
• DSCR: 1.23
• 1% rule: 0.94%
• Cash to close: $34,860

Investor read

• This is a 2-bed/1.0-bath single-family listed at $124k.
• At list price, monthly cash flow is $26 ($310/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 $117k (5.6% below list).
• It's been on market 34 days — a 3% lower offer ($121k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $117k (5.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $861 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#37 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, schools F, crime F.
• Hobbs Municipal Schools (town): math 17% / reading 31% proficiency, ranked #45 of 95 in NM (top 47%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $122/mo; built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 231 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 172 units permitted in Lea County in 2024 (0 in 5+ unit buildings).
• Lea County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 9y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance); severe wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 34 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.