507 S Lake St

Carlsbad, NM 88220

$140,000C-

2 bd · 1.0 ba · 870 sqft · Built 1950 · SingleFamily · Active · 96 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,454/mo
• Mortgage (P&I): −$734
• Tax + insurance: −$124
• HOA: −$0
• Vac / Maint / Mgmt: −$305
• Net cashflow: $290/mo
• Annual: $3,485/yr
• Cap rate: 8.78%
• Cash-on-cash: 8.89%
• DSCR: 1.40
• 1% rule: 1.04%
• Cash to close: $39,200

Investor read

• This is a 2-bed/1.0-bath single-family listed at $140k.
• At list price, monthly cash flow is $290 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $140k).
• It's been on market 96 days — a 9% lower offer ($127k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $127k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $968 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#20 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+, employment A; Watch: commute C-, health & safety C-, schools D.
• Watch-outs: built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 363 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 156 units permitted in Eddy County in 2024 (0 in 5+ unit buildings).
• Eddy County population projected at +36% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 8y ago; this cycle's ask has dropped $19k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 96 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1950 — 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.