1261 S Gilbert St #202

Castle Rock, CO 80104

$185,000D

1 bd · 1.0 ba · 634 sqft · Built 1984 · Condo · Active · 347 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,800/mo
• Mortgage (P&I): −$970
• Tax + insurance: −$162
• HOA: −$335
• Vac / Maint / Mgmt: −$378
• Net cashflow: $-45/mo
• Annual: $-537/yr
• Cap rate: 6.00%
• Cash-on-cash: -1.04%
• DSCR: 0.95
• 1% rule: 0.97%
• Cash to close: $51,800

Investor read

• This is a 1-bed/1.0-bath condo listed at $185k.
• At list price, monthly cash flow is $-45 ($-537/yr) — negative.
• To cash-flow at today's rent, offer at most $177k (4.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $180k (2.7% below list).
• It's been on market 347 days — a 12% lower offer ($163k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $163k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#15 in CO, #2,469 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, amenities A+, employment A+; Watch: health & safety D+, commute D-, cost of living F.
• Douglas County School District No. RE-1 (suburban): math 45% / reading 62% proficiency, ranked #7 of 86 in CO (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Zoned schools: South Ridge Elementary An Ib World School (math 22% / reading 27%, grade F, #606 of 966 statewide, top 65%, 411 students, 34% FRL); Mesa Middle School (math 26% / reading 47%, grade F, #102 of 270 statewide, top 38%, 957 students, 19% FRL); Douglas County High School (math 46% / reading 67%, grade C, #72 of 381 statewide, top 19%, 1,758 students, 0% FRL).
• Zoned-school proficiency averages 39% at this address vs 54% district-wide (-14 pts) — the specific schools serving this property underperform the Douglas County School District No. RE-1 average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising (+1.2%/yr); 416 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 3,131 units permitted in Douglas County in 2024 (950 in 5+ unit buildings).
• Douglas County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts; this cycle's ask has dropped $25k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $51k; list at $185k implies a 265% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 3.1% in Castle Rock — 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.
• This rent is only 16% of the median local income ($134k/yr) — well below the 30% rent-burden line; pricing power to push rent on renewal without tenant pushback.

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 347 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?