78368 Desert Willow Dr

Desert Palms, CA 92211

$361,000D

2 bd · 2.0 ba · 1,548 sqft · Built 1994 · SingleFamily · Pending · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,412/mo
• Mortgage (P&I): −$1,893
• Tax + insurance: −$334
• HOA: −$677
• Vac / Maint / Mgmt: −$717
• Net cashflow: $-209/mo
• Annual: $-2,505/yr
• Cap rate: 5.60%
• Cash-on-cash: -2.48%
• DSCR: 0.89
• 1% rule: 0.95%
• Cash to close: $101,080

Investor read

• This is a 2-bed/2.0-bath single-family listed at $361k.
• At list price, monthly cash flow is $-209 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $324k (10.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $341k (5.5% below list).
• It's been on market 32 days — a 3% lower offer ($350k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $324k (10.2% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#544 in CA) — a middle-class / working-renter tenant base. Strengths: crime B+; Watch: housing C-, amenities D+, commute 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 soft (-0.3%/yr); 633 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 70% 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.
• 2 sale attempts 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 $160k; list at $361k implies a 126% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 6→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 3.9% in Desert Palms — 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 $3,412/mo this rent would consume 46% of the median local household income ($88k/yr) (locally 1181% 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 32 days. Have you received any prior offers? Is the seller open to a 10% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.