511 Spruce St SE

Albuquerque, NM 87106

$850,000C

42 bd · 36.0 ba · 1,188 sqft · Built 1936 · MultiFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,761/mo
• Mortgage (P&I): −$4,457
• Tax + insurance: −$618
• HOA: −$0
• Vac / Maint / Mgmt: −$1,840
• Net cashflow: $1,845/mo
• Annual: $22,146/yr
• Cap rate: 8.90%
• Cash-on-cash: 9.30%
• DSCR: 1.41
• 1% rule: 1.03%
• Cash to close: $238,000

Investor read

• This is a 6 × 7-bed/6.0-bath units multifamily listed at $850k.
• At list price, monthly cash flow is $2k ($22k/yr) — positive. Per door: $308/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $850k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#13 in NM) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, cost of living A+; Watch: schools D-, crime 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.
• Watch-outs: built in 1936 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 183 active listings in the ZIP; 1,316 units permitted in Bernalillo County in 2024 (546 in 5+ unit buildings).
• Cap rate 8.9% vs local median 3.7% in Albuquerque — 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 $8,761/mo this rent would consume 211% of the median local household income ($50k/yr) (locally 2859% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1936 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.