39778 Montella Dr

Indio, CA 92203

$538,005D+

4 bd · 2.0 ba · 1,692 sqft · Built 2026 · SingleFamily · Active · 38 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,606/mo
• Mortgage (P&I): −$2,821
• Tax + insurance: −$897
• HOA: −$0
• Vac / Maint / Mgmt: −$967
• Net cashflow: $-79/mo
• Annual: $-950/yr
• Cap rate: 6.12%
• Cash-on-cash: -0.63%
• DSCR: 0.97
• 1% rule: 0.86%
• Cash to close: $150,641

Investor read

• This is a 4-bed/2.0-bath single-family listed at $538k. Condition is rated good.
• At list price, monthly cash flow is $-79 ($-950/yr) — negative.
• To cash-flow at today's rent, offer at most $527k (2.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $461k (14.4% below list).
• It's been on market 38 days — a 3% lower offer ($522k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $461k (14.4% 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 53/100 on livability (#927 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing B+; Watch: employment D, crime F, amenities 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.
• Zoned schools: Ronald Reagan Elementary (834 students, 53% FRL); Desert Ridge Academy (math 24% / reading 75%, grade C, #98 of 498 statewide, top 21%, 1,030 students, 81% FRL); Shadow Hills High (math 30% / reading 53%, grade F, #498 of 1,170 statewide, top 43%, 1,751 students, 77% FRL).
• Market conditions: Rents rising fast (+11.6%/yr); 639 active listings in the ZIP; 24 comparable units currently listed for rent nearby; rentals lingering (median 85d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 88% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 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.
• Climate carrying-cost: extreme-heat days projected 5→12/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 4.1% in Indio — 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 $4,606/mo this rent would consume 57% of the median local household income ($97k/yr) (locally 20% 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 38 days. Have you received any prior offers? Is the seller open to a 14% concession, seller financing, or rate buy-down credit?
• 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?
• 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.