23 Don Quixote Dr

Rancho Mirage, CA 92270

$425,000C+

2 bd · 2.0 ba · 1,270 sqft · Built 1978 · Condo · Active · 50 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,193/mo
• Mortgage (P&I): −$2,229
• Tax + insurance: −$461
• HOA: −$614
• Vac / Maint / Mgmt: −$1,091
• Net cashflow: $799/mo
• Annual: $9,592/yr
• Cap rate: 8.55%
• Cash-on-cash: 8.06%
• DSCR: 1.36
• 1% rule: 1.22%
• Cash to close: $119,000

Investor read

• This is a 2-bed/2.0-bath condo listed at $425k.
• At list price, monthly cash flow is $799 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $425k).
• It's been on market 50 days — a 3% lower offer ($412k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $412k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,065 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+; Watch: amenities F, commute F, cost of living F.
• Desert Sands Unified (suburban): math 31% / reading 56% proficiency, ranked #199 of 517 in CA (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+3.7%/yr); 532 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% 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.
• 12 sale attempts since 27y 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 $200k; list at $425k implies a 112% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.5% vs local median 3.0% in Rancho Mirage — 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 $5,193/mo this rent would consume 58% of the median local household income ($107k/yr) (locally 498% 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 50 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.