4307 Wallace St SE

South Valley, NM 87105

$85,000B

4 bd · 3.0 ba · 2,400 sqft · Built 2010 · Other · Pending · 309 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,196/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$198
• HOA: −$0
• Vac / Maint / Mgmt: −$461
• Net cashflow: $1,091/mo
• Annual: $13,091/yr
• Cap rate: 21.69%
• Cash-on-cash: 55.00%
• DSCR: 3.45
• 1% rule: 2.58%
• Cash to close: $23,800

Investor read

• This is a 4-bed/3.0-bath other listed at $85k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 309 days — a 12% lower offer ($75k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $75k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#113 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A; Watch: commute C-, employment D, schools 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.
• Market conditions: 160 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 1,316 units permitted in Bernalillo County in 2024 (546 in 5+ unit buildings).
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $24k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 21.7% vs local median 3.9% in South Valley — 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 $2,196/mo this rent would consume 47% of the median local household income ($56k/yr) (locally 1175% 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 309 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.