2401 W Southern Ave #184

Tempe, AZ 85282

$58,000B-

2 bd · 2.0 ba · 1,344 sqft · Built 1974 · MultiFamily · Active · 120 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,999/mo
• Mortgage (P&I): −$304
• Tax + insurance: −$97
• HOA: −$0
• Vac / Maint / Mgmt: −$420
• Net cashflow: $1,178/mo
• Annual: $14,141/yr
• Cap rate: 30.67%
• Cash-on-cash: 87.07%
• DSCR: 4.87
• 1% rule: 3.45%
• Cash to close: $16,240

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $58k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $58k).
• It's been on market 120 days — a 9% lower offer ($53k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $53k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $401 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#10 in AZ, #2,527 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: cost of living C-, health & safety D, crime F.
• Tempe School District (4258) (urban): math 17% / reading 29% proficiency, ranked #170 of 249 in AZ (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Ward Traditional Academy (math 54% / reading 65%, grade B-, #148 of 1,109 statewide, top 15%, 377 students, 25% FRL); Geneva Epps Mosley Middle School (math 6% / reading 14%, grade F, #188 of 218 statewide, top 88%, 755 students, 72% FRL); Tempe High School (math 13% / reading 19%, grade F, #258 of 381 statewide, top 68%, 1,584 students, 51% FRL).
• Market conditions: Rents soft (-1.6%/yr); 181 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 36,011 units permitted in Maricopa County in 2024 (12,801 in 5+ unit buildings).
• Maricopa County population projected at +38% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $22k (28%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $16k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 30.7% vs local median 3.4% in Tempe — 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 30% of the median local income ($79k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 120 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.