701 S Meadow St

Payson, AZ 85541

$304,900C-

2 bd · 2.0 ba · 1,071 sqft · Built 2019 · MultiFamily · Active · 93 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,906/mo
• Mortgage (P&I): −$1,599
• Tax + insurance: −$204
• HOA: −$0
• Vac / Maint / Mgmt: −$610
• Net cashflow: $493/mo
• Annual: $5,915/yr
• Cap rate: 8.23%
• Cash-on-cash: 6.93%
• DSCR: 1.31
• 1% rule: 0.95%
• Cash to close: $85,372

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $305k.
• At list price, monthly cash flow is $493 ($6k/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 $291k (4.7% below list).
• It's been on market 93 days — a 9% lower offer ($277k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $277k (9.0% below list) — sets the bar for market timing.
• 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 69/100 on livability (#44 in AZ) — a middle-class / working-renter tenant base. Strengths: housing A, crime B, cost of living B; Watch: amenities D-, commute F, health & safety 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.
• Zoned schools: Julia Randall Elementary School (math 20% / reading 36%, grade F, #586 of 1,109 statewide, top 53%, 576 students, 58% FRL); Rim Country Middle School (math 21% / reading 31%, grade F, #100 of 218 statewide, top 47%, 493 students, 53% FRL); Payson High School (math 22% / reading 32%, grade F, #141 of 381 statewide, top 38%, 790 students, 40% FRL) — zoned schools at 50% FRL track the district average.
• Market conditions: 706 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 71% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 4 sale attempts since 10y 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.
• Cap rate 8.2% 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.
• At $2,906/mo this rent would consume 53% of the median local household income ($66k/yr) (locally 523% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 93 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.