445 N Farrell

Palm Springs, CA 92262

$689,000D

4 bd · 2.0 ba · 1,457 sqft · Built 1959 · SingleFamily · Active · 139 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,768/mo
• Mortgage (P&I): −$3,613
• Tax + insurance: −$607
• HOA: −$0
• Vac / Maint / Mgmt: −$1,001
• Net cashflow: $-453/mo
• Annual: $-5,442/yr
• Cap rate: 5.50%
• Cash-on-cash: -2.82%
• DSCR: 0.87
• 1% rule: 0.69%
• Cash to close: $192,920

Investor read

• This is a 4-bed/2.0-bath single-family listed at $689k.
• At list price, monthly cash flow is $-453 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $609k (11.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $477k (30.8% below list).
• It's been on market 139 days — a 12% lower offer ($606k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $477k (30.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#348 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+; Watch: schools C-, crime F, cost of living F.
• Palm Springs Unified (suburban): math 21% / reading 42% proficiency, ranked #328 of 517 in CA (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 647 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 47% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 5 sale attempts since 20y ago; this cycle's ask has dropped $89k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $215k; list at $689k implies a 220% 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 5.5% vs local median 2.7% in Palm Springs — 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 $4,768/mo this rent would consume 80% of the median local household income ($72k/yr) (locally 1866% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 139 days. Have you received any prior offers? Is the seller open to a 31% concession, seller financing, or rate buy-down credit?
• Built in 1959 — 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.
• 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.