119 Montezuma Rd

Borrego Springs, CA 92004

$550,000D

2 bd · 3.0 ba · 2,597 sqft · Built 1963 · SingleFamily · Active · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,259/mo
• Mortgage (P&I): −$2,884
• Tax + insurance: −$557
• HOA: −$0
• Vac / Maint / Mgmt: −$894
• Net cashflow: $-76/mo
• Annual: $-912/yr
• Cap rate: 6.13%
• Cash-on-cash: -0.59%
• DSCR: 0.97
• 1% rule: 0.77%
• Cash to close: $154,000

Investor read

• This is a 2-bed/3.0-bath single-family listed at $550k.
• At list price, monthly cash flow is $-76 ($-912/yr) — negative.
• To cash-flow at today's rent, offer at most $537k (2.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $426k (22.6% below list).
• It's been on market 52 days — a 3% lower offer ($534k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $426k (22.6% 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 $16k of value loss. Plan a longer hold.
• Location reads 58/100 on livability (#712 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+, housing A+; Watch: amenities F, commute F, cost of living F.
• Borrego Springs Unified (rural): math 20% / reading 35% proficiency, ranked #1,120 of 1,400 in CA (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Borrego Springs Elementary (math 24% / reading 24%, grade F, #973 of 1,571 statewide, top 73%, 154 students, 84% FRL); Borrego Springs Middle (math 12% / reading 32%, grade F, #388 of 498 statewide, top 80%, 80 students, 92% FRL); Borrego Springs High (math 30% / reading 50%, grade F, #520 of 1,170 statewide, top 45%, 124 students, 87% FRL) — zoned schools average 88% FRL vs 72% district-wide (16 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: 173 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 13 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 $290k; list at $550k implies a 90% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 11→31/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

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 52 days. Have you received any prior offers? Is the seller open to a 23% concession, seller financing, or rate buy-down credit?
• Built in 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.