412 S Sierra Madre

Palm Desert, CA 92260

$459,000D

2 bd · 2.0 ba · 1,303 sqft · Built 1979 · Condo · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,883/mo
• Mortgage (P&I): −$2,407
• Tax + insurance: −$709
• HOA: −$942
• Vac / Maint / Mgmt: −$1,025
• Net cashflow: $-200/mo
• Annual: $-2,404/yr
• Cap rate: 5.77%
• Cash-on-cash: -1.87%
• DSCR: 0.92
• 1% rule: 1.06%
• Cash to close: $128,520

Investor read

• This is a 2-bed/2.0-bath condo listed at $459k.
• At list price, monthly cash flow is $-200 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $424k (7.7% below list).
• Meets the 1% rule at list price ($5k rent vs $459k).
• It's been on market 70 days — a 6% lower offer ($431k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $424k (7.7% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k 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: schools A-, 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.
• Market conditions: Rents rising (+1.6%/yr); 545 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 85% 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.
• 11 sale attempts since 21y 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 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.8% 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 $4,883/mo this rent would consume 84% 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 70 days. Have you received any prior offers? Is the seller open to a 8% concession, seller financing, or rate buy-down credit?
• Built in 1979 — 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?