2424 E Palm Cyn Unit 2D

Palm Springs, CA 92264

$450,000D-

2 bd · 2.0 ba · 1,850 sqft · Built 1972 · Condo · Active · 36 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,906/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$700
• HOA: −$1,050
• Vac / Maint / Mgmt: −$1,030
• Net cashflow: $-234/mo
• Annual: $-2,805/yr
• Cap rate: 5.67%
• Cash-on-cash: -2.23%
• DSCR: 0.90
• 1% rule: 1.09%
• Cash to close: $126,000

Investor read

• This is a 2-bed/2.0-bath condo listed at $450k.
• At list price, monthly cash flow is $-234 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $409k (9.2% below list).
• Meets the 1% rule at list price ($5k rent vs $450k).
• It's been on market 36 days — a 3% lower offer ($436k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $409k (9.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k 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: HOA is 21% of rent.
• Market conditions: Rents soft (-0.4%/yr); 492 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• 12 sale attempts since 25y 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 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.7% 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 $4,906/mo this rent would consume 76% of the median local household income ($78k/yr) (locally 1215% 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 36 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?