72847 Don Larson Ln

Palm Desert, CA 92260

$315,000D-

2 bd · 2.0 ba · 1,258 sqft · Built 1978 · Condo · Active · 563 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,218/mo
• Mortgage (P&I): −$1,652
• Tax + insurance: −$433
• HOA: −$740
• Vac / Maint / Mgmt: −$676
• Net cashflow: $-283/mo
• Annual: $-3,398/yr
• Cap rate: 5.21%
• Cash-on-cash: -3.85%
• DSCR: 0.83
• 1% rule: 1.02%
• Cash to close: $88,200

Investor read

• This is a 2-bed/2.0-bath condo listed at $315k.
• At list price, monthly cash flow is $-283 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $265k (15.9% below list).
• Meets the 1% rule at list price ($3k rent vs $315k).
• It's been on market 563 days — a 12% lower offer ($277k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $265k (15.9% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,050 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment B+, housing B; Watch: crime D, amenities F, commute F.
• Desert Sands Unified (suburban): math 31% / reading 56% proficiency, ranked #199 of 517 in CA (top 38%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Abraham Lincoln Elementary (585 students, 80% FRL); La Quinta Middle (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 754 students, 83% FRL); Palm Desert High (math 42% / reading 67%, grade C-, #256 of 1,170 statewide, top 24%, 2,050 students, 57% FRL) — zoned schools average 73% FRL vs 56% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: HOA is 23% of rent.
• Market conditions: Rents rising (+1.6%/yr); 551 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 8 sale attempts since 25y ago; this cycle's ask is 12500% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $238k; 33% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 8→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.2% vs local median 3.5% in Palm Desert — 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 $3,218/mo this rent would consume 55% of the median local household income ($70k/yr) (locally 1734% 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 563 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1978 — 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?
• 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?