Plan 1 Plan

Sterling Ranch, CO 80125

$589,900D

6 bd · 5.0 ba · 1,720 sqft · Built — · MultiFamily · Active · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,239/mo
• Mortgage (P&I): −$3,093
• Tax + insurance: −$983
• HOA: −$0
• Vac / Maint / Mgmt: −$1,100
• Net cashflow: $62/mo
• Annual: $746/yr
• Cap rate: 6.42%
• Cash-on-cash: 0.45%
• DSCR: 1.02
• 1% rule: 0.89%
• Cash to close: $165,172

Investor read

• This is a 2 × 3.0-bed/2.5-bath units multifamily listed at $590k. Condition is rated good.
• At list price, monthly cash flow is $62 ($746/yr) — positive. Per door: $31/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $524k (11.2% below list).
• It's been on market 57 days — a 3% lower offer ($572k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $524k (11.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $18k of value loss. Plan a longer hold.
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Douglas County School District No. RE-1 (suburban): math 45% / reading 62% proficiency, ranked #7 of 86 in CO (top 8%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 8% free/reduced lunch — higher-income household profile.
• Zoned schools: Roxborough Intermediate (math 42% / reading 47%, grade F, #277 of 966 statewide, top 31%, 419 students, 8% FRL); Ranch View Middle School (math 41% / reading 71%, grade B-, #22 of 270 statewide, top 9%, 822 students, 8% FRL); Thunderridge High School (math 52% / reading 75%, grade B-, #39 of 381 statewide, top 10%, 1,881 students, 0% FRL) — zoned schools at 5% FRL track the district average.
• Market conditions: Rents falling (-3.0%/yr); 357 active listings in the ZIP; high-income renter base; 3,131 units permitted in Douglas County in 2024 (950 in 5+ unit buildings).
• Douglas County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 6.4% vs local median 2.1% in Sterling Ranch — 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.
• This rent runs 35% of the median local income ($180k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 57 days. Have you received any prior offers? Is the seller open to a 11% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.