18202 N Cave Creek Rd #240

Phoenix, AZ 85032

$125,000D

2 bd · 1.0 ba · 836 sqft · Built 1983 · Condo · Active · 64 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,448/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$208
• HOA: −$375
• Vac / Maint / Mgmt: −$304
• Net cashflow: $-95/mo
• Annual: $-1,137/yr
• Cap rate: 5.38%
• Cash-on-cash: -3.25%
• DSCR: 0.86
• 1% rule: 1.16%
• Cash to close: $35,000

Investor read

• This is a 2-bed/1.0-bath condo listed at $125k.
• At list price, monthly cash flow is $-95 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $111k (11.0% below list).
• Meets the 1% rule at list price ($1k rent vs $125k).
• It's been on market 64 days — a 6% lower offer ($118k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $111k (11.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k 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.
• Paradise Valley Unified District (4241) (urban): math 39% / reading 46% proficiency, ranked #56 of 249 in AZ (top 22%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 26% of rent.
• Market conditions: Rents soft (-1.5%/yr); 341 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 9d 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.
• 3 sale attempts since 5y 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: extreme-heat days projected 6→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 3.3% 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

• 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 64 days. Have you received any prior offers? Is the seller open to a 11% 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.
• 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?