16657 E Gunsight Dr #194

Fountain Hills, AZ 85268

$200,000C-

1 bd · 1.0 ba · 696 sqft · Built 1986 · Condo · Active · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,210/mo
• Mortgage (P&I): −$1,049
• Tax + insurance: −$139
• HOA: −$315
• Vac / Maint / Mgmt: −$464
• Net cashflow: $243/mo
• Annual: $2,915/yr
• Cap rate: 7.75%
• Cash-on-cash: 5.21%
• DSCR: 1.23
• 1% rule: 1.11%
• Cash to close: $56,000

Investor read

• This is a 1-bed/1.0-bath condo listed at $200k.
• At list price, monthly cash flow is $243 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $200k).
• It's been on market 25 days — a 2% lower offer ($197k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $197k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#45 in AZ) — a middle-class / working-renter tenant base. Strengths: employment A+, crime A, housing A; Watch: amenities F, commute F, cost of living F.
• Fountain Hills Unified District (4247) (other): math 32% / reading 47% proficiency, ranked #61 of 249 in AZ (top 24%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 18% free/reduced lunch — higher-income household profile.
• Zoned schools: Mcdowell Mountain Elementary School (math 47% / reading 57%, grade C-, #243 of 1,109 statewide, top 23%, 297 students, 32% FRL); Fountain Hills Middle School (math 31% / reading 45%, grade F, #54 of 218 statewide, top 25%, 390 students, 22% FRL); Fountain Hills High School (math 27% / reading 47%, grade F, #84 of 381 statewide, top 23%, 466 students, 17% FRL).
• Market conditions: Rents rising (+1.0%/yr); 455 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 19y ago; this cycle's ask has dropped $20k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 5→13/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.8% vs local median 3.3% in Fountain Hills — 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.

Questions for listing agent

• 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.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.