9365 Morfontaine Rd

Colorado Springs, CO 80831

$390,000D-

3 bd · 2.0 ba · 1,339 sqft · Built 2004 · SingleFamily · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,889/mo
• Mortgage (P&I): −$2,045
• Tax + insurance: −$298
• HOA: −$8
• Vac / Maint / Mgmt: −$607
• Net cashflow: $-69/mo
• Annual: $-831/yr
• Cap rate: 6.08%
• Cash-on-cash: -0.76%
• DSCR: 0.97
• 1% rule: 0.74%
• Cash to close: $109,200

Investor read

• This is a 3-bed/2.0-bath single-family listed at $390k.
• At list price, monthly cash flow is $-69 ($-831/yr) — negative.
• To cash-flow at today's rent, offer at most $378k (3.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $289k (25.9% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $289k (25.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#23 in CO, #2,639 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, housing A+, health & safety A+; Watch: cost of living C-, crime F.
• El Paso County Colorado School District 49 (urban): math 27% / reading 47% proficiency, ranked #27 of 86 in CO (top 31%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 17% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.1%/yr); 513 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 3,906 units permitted in El Paso County in 2024 (872 in 5+ unit buildings).
• El Paso County population projected at +28% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $300k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 3.3% in Colorado 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.

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?
• 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 B-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?
• 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.