204 S Limit Ave

Mountainair, NM 87036

$116,000D

2 bd · 1.5 ba · 1,034 sqft · Built 1940 · Other · Active · 504 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $984/mo
• Mortgage (P&I): −$608
• Tax + insurance: −$105
• HOA: −$0
• Vac / Maint / Mgmt: −$207
• Net cashflow: $64/mo
• Annual: $771/yr
• Cap rate: 6.96%
• Cash-on-cash: 2.37%
• DSCR: 1.11
• 1% rule: 0.85%
• Cash to close: $32,480

Investor read

• This is a 2-bed/1.5-bath other listed at $116k. Condition is rated poor.
• At list price, monthly cash flow is $64 ($771/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 $98k (15.2% below list).
• It's been on market 504 days — a 12% lower offer ($102k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $98k (15.2% below list) — sets the bar for 1% rule.
• In year one you build about $5k of equity ($802 loan paydown + $5k appreciation (3.9% local appreciation)).
• Location reads 56/100 on livability (#188 in NM) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A; Watch: amenities C-, schools F, crime F.
• Mountainair Public Schools (rural): math 25% / reading 25% proficiency, ranked #25 of 29 in NM (top 86%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 52 active listings in the ZIP.
• Torrance County population projected at -29% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 2y 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.
• At projected returns (3.9% appreciation + 3.0% rent growth), your $32k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 7, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 504 days. Have you received any prior offers? Is the seller open to a 15% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1940 — 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.
• 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?

Repairs flagged (vision-AI assessment)

• Major: exterior siding — Severe peeling and damage
• Major: interior walls — Severe damage and peeling
• Major: HVAC system — Severe clutter and damage
• Major: roof — Severe clutter and damage
• Major: windows — Severe clutter and damage