700 E Permian Dr

Hobbs, NM 88240

$225,000C-

3 bd · 2.0 ba · 2,128 sqft · Built 1955 · SingleFamily · Pending · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,112/mo
• Mortgage (P&I): −$1,180
• Tax + insurance: −$241
• HOA: −$0
• Vac / Maint / Mgmt: −$443
• Net cashflow: $248/mo
• Annual: $2,971/yr
• Cap rate: 7.97%
• Cash-on-cash: 5.98%
• DSCR: 1.27
• 1% rule: 0.94%
• Cash to close: $63,000

Investor read

• This is a 3-bed/2.0-bath single-family listed at $225k.
• At list price, monthly cash flow is $248 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $211k (6.1% below list).
• It's been on market 66 days — a 6% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $211k (6.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#37 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, housing A+; Watch: employment D+, schools F, crime F.
• Hobbs Municipal Schools (town): math 17% / reading 31% proficiency, ranked #45 of 95 in NM (top 47%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: flood insurance adds $66/mo; built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 231 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 172 units permitted in Lea County in 2024 (0 in 5+ unit buildings).
• Lea County population projected at +50% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts; this cycle's ask has dropped $20k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major flood risk; severe wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 40% of the median local income ($63k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 66 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?
• 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.