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Payson, AZ 85541

$114,900C

1 bd · 1.0 ba · 600 sqft · Built 1969 · Land · Pending · 106 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,268/mo
• Mortgage (P&I): −$603
• Tax + insurance: −$91
• HOA: −$0
• Vac / Maint / Mgmt: −$266
• Net cashflow: $308/mo
• Annual: $3,701/yr
• Cap rate: 9.51%
• Cash-on-cash: 11.50%
• DSCR: 1.51
• 1% rule: 1.10%
• Cash to close: $32,172

Investor read

• This is a 1-bed/1.0-bath land listed at $115k.
• At list price, monthly cash flow is $308 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $115k).
• It's been on market 106 days — a 9% lower offer ($105k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $105k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $794 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 69/100 on livability (#44 in AZ) — a middle-class / working-renter tenant base. Strengths: housing A, crime B, cost of living B; Watch: schools C-, amenities D-, commute F.
• Payson Unified District (4209) (town): math 20% / reading 32% proficiency, ranked #138 of 249 in AZ (top 55%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Market conditions: 695 active listings in the ZIP; 217 units permitted in Gila County in 2024 (0 in 5+ unit buildings).
• Gila County population projected at -18% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 3 sale attempts since 17y 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.
• Current owner paid $55k; list at $115k implies a 109% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $32k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.5% vs local median 3.3% in Payson — 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 106 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1969 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.