4939 Sherwood Rd

Las Cruces, NM 88012

$230,000D-

3 bd · 2.0 ba · 1,184 sqft · Built 2008 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,731/mo
• Mortgage (P&I): −$1,206
• Tax + insurance: −$212
• HOA: −$0
• Vac / Maint / Mgmt: −$363
• Net cashflow: $-51/mo
• Annual: $-614/yr
• Cap rate: 6.03%
• Cash-on-cash: -0.95%
• DSCR: 0.96
• 1% rule: 0.75%
• Cash to close: $64,400

Investor read

• This is a 3-bed/2.0-bath single-family listed at $230k.
• At list price, monthly cash flow is $-51 ($-614/yr) — negative.
• To cash-flow at today's rent, offer at most $221k (3.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $173k (24.8% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $173k (24.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#120 in NM) — a working-class tenant base; expect higher turnover. Strengths: cost of living A+, housing A; Watch: amenities D+, schools D-, crime F.
• Las Cruces Public Schools (urban): math 42% / reading 68% proficiency, ranked #5 of 29 in NM (top 17%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+3.5%/yr); 592 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 964 units permitted in Doña Ana County in 2024 (0 in 5+ unit buildings).
• 2 sale attempts since 10y 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.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 6→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 30% of the median local income ($69k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• 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?
• 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.
• 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.