111 Canyon Rock Rd

Palm Springs, CA 92264

$649,000D

3 bd · 2.0 ba · 2,096 sqft · Built 1951 · SingleFamily · Pending · 85 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,360/mo
• Mortgage (P&I): −$3,403
• Tax + insurance: −$444
• HOA: −$0
• Vac / Maint / Mgmt: −$1,126
• Net cashflow: $387/mo
• Annual: $4,641/yr
• Cap rate: 7.01%
• Cash-on-cash: 2.55%
• DSCR: 1.11
• 1% rule: 0.83%
• Cash to close: $181,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $649k.
• At list price, monthly cash flow is $387 ($5k/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 $536k (17.4% below list).
• It's been on market 85 days — a 6% lower offer ($610k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $536k (17.4% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#348 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+; Watch: crime F, cost of living F, health & safety F.
• Palm Springs Unified (suburban): math 21% / reading 42% proficiency, ranked #328 of 517 in CA (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Cahuilla Elementary (421 students, 93% FRL); Raymond Cree Middle (708 students, 98% FRL); Palm Springs High (math 30% / reading 51%, grade F, #508 of 1,170 statewide, top 44%, 1,584 students, 97% FRL) — zoned schools average 96% FRL vs 73% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1951 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.4%/yr); 498 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 52% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 27y ago; this cycle's ask has dropped $90k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $147k; list at $649k implies a 341% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 9→27/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.0% vs local median 2.7% in Palm Springs — 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 $5,360/mo this rent would consume 83% of the median local household income ($78k/yr) (locally 1215% 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 85 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1951 — 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.