66271 Buena Vis

Desert Hot Springs, CA 92240

$549,900C

3 bd · 3.0 ba · 1,718 sqft · Built 1946 · MultiFamily · Active · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,222/mo
• Mortgage (P&I): −$2,884
• Tax + insurance: −$756
• HOA: −$0
• Vac / Maint / Mgmt: −$1,517
• Net cashflow: $2,066/mo
• Annual: $24,790/yr
• Cap rate: 10.80%
• Cash-on-cash: 16.10%
• DSCR: 1.72
• 1% rule: 1.31%
• Cash to close: $153,972

Investor read

• This is a 3 × 4-bed/3.0-bath units multifamily listed at $550k.
• At list price, monthly cash flow is $2k ($25k/yr) — positive. Per door: $689/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $550k).
• It's been on market 49 days — a 3% lower offer ($533k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $533k (3.0% below list) — sets the bar for market timing.
• 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 49/100 on livability (#1,149 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing B+; Watch: crime D+, schools F, amenities F.
• Palm Springs Unified (suburban): math 21% / reading 42% proficiency, ranked #328 of 517 in CA (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.7%/yr); 515 active listings in the ZIP; 37 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 49% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 2 sale attempts since 4y 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 $400k; 37% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.7% rent growth), your $154k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.8% vs local median 3.9% in Desert Hot Springs — 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 $7,222/mo this rent would consume 160% of the median local household income ($54k/yr) (locally 2095% 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 49 days. Have you received any prior offers? Is the seller open to a 3% 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?
• Built in 1946 — 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?
• Crime grade is D 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.