2228 John St SE

Albuquerque, NM 87102

$150,000B

5 bd · 2.0 ba · 1,204 sqft · Built 1936 · Other · Active · 127 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,990/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$161
• HOA: −$0
• Vac / Maint / Mgmt: −$418
• Net cashflow: $625/mo
• Annual: $7,496/yr
• Cap rate: 11.29%
• Cash-on-cash: 17.85%
• DSCR: 1.79
• 1% rule: 1.33%
• Cash to close: $42,000

Investor read

• This is a 5-bed/2.0-bath other listed at $150k.
• At list price, monthly cash flow is $625 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $150k).
• It's been on market 127 days — a 12% lower offer ($132k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $132k (12.0% 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 $4k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#13 in NM) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools D-, crime F.
• Albuquerque Public Schools (urban): math 51% / reading 75% proficiency, ranked #3 of 29 in NM (top 10%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1936 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+4.9%/yr); 143 active listings in the ZIP; 2 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 1,316 units permitted in Bernalillo County in 2024 (546 in 5+ unit buildings).
• 3 sale attempts; this cycle's ask has dropped $20k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 4.9% rent growth), your $42k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 11.3% vs local median 3.7% in Albuquerque — 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 $1,990/mo this rent would consume 56% of the median local household income ($43k/yr) (locally 1721% 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 127 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1936 — 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 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?
• 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.