726 E 3rd

Cortez, CO 81321

$235,000D+

3 bd · 1.0 ba · 1,206 sqft · Built 1963 · SingleFamily · Active · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,880/mo
• Mortgage (P&I): −$1,232
• Tax + insurance: −$183
• HOA: −$0
• Vac / Maint / Mgmt: −$395
• Net cashflow: $70/mo
• Annual: $838/yr
• Cap rate: 6.65%
• Cash-on-cash: 1.27%
• DSCR: 1.06
• 1% rule: 0.80%
• Cash to close: $65,800

Investor read

• This is a 3-bed/1.0-bath single-family listed at $235k.
• At list price, monthly cash flow is $70 ($838/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 $188k (20.0% below list).
• It's been on market 52 days — a 3% lower offer ($228k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $188k (20.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#125 in CO) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+, housing A; Watch: schools D-, crime F, amenities F.
• Montezuma-Cortez School District No. Re-1 (town): math 16% / reading 33% proficiency, ranked #70 of 86 in CO (top 81%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 226 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 24 units permitted in Montezuma County in 2024 (0 in 5+ unit buildings).
• 4 sale attempts since 7y 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.
• Current owner paid $150k; list at $235k implies a 57% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 3.3% in Cortez — 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.
• This rent runs 38% of the median local income ($60k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 52 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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.
• 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.