303 E South Mountain Ave #49

Phoenix, AZ 85042

$39,990C+

3 bd · 2.0 ba · 1,200 sqft · Built 1994 · Manufactured · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,454/mo
• Mortgage (P&I): −$210
• Tax + insurance: −$67
• HOA: −$0
• Vac / Maint / Mgmt: −$305
• Net cashflow: $872/mo
• Annual: $10,466/yr
• Cap rate: 32.46%
• Cash-on-cash: 93.47%
• DSCR: 5.16
• 1% rule: 3.64%
• Cash to close: $11,197

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $40k. Condition is rated fair.
• At list price, monthly cash flow is $872 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $40k).
• It's been on market 87 days — a 6% lower offer ($38k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $38k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#16 in AZ, #3,924 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: health & safety C-, crime F.
• Roosevelt Elementary District (4279) (urban): math 8% / reading 14% proficiency, ranked #234 of 249 in AZ (top 94%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Bernard Black Elementary School (math 9% / reading 18%, grade F, #923 of 1,109 statewide, top 84%, 617 students, 80% FRL); South Mountain High School (math 7% / reading 15%, grade F, #292 of 381 statewide, top 77%, 2,146 students, 85% FRL) — zoned schools average 82% FRL vs 36% district-wide (47 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents falling (-4.0%/yr); 357 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $24k (37%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 32.5% vs local median 3.2% in Phoenix — 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.

Questions for listing agent

• It's been on market 87 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• 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.

Repairs flagged (vision-AI assessment)

• Minor: Painting — Interior walls and exterior siding need touch-up paint.
• Minor: Roof inspection — Aging roof may need minor repairs or replacement.
• Minor: Window cleaning — Windows appear dusty and could use cleaning.
• Minor: HVAC maintenance — No visible issues, but may need cleaning or minor repairs.
• Minor: Landscaping — Minimal landscaping could be improved with some updates.