3425 Porter St

Heber-Overgaard, AZ 85928

$395,000D

4 bd · 2.5 ba · 1,880 sqft · Built 1990 · SingleFamily · Active · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,395/mo
• Mortgage (P&I): −$2,071
• Tax + insurance: −$260
• HOA: −$0
• Vac / Maint / Mgmt: −$503
• Net cashflow: $-439/mo
• Annual: $-5,269/yr
• Cap rate: 4.96%
• Cash-on-cash: -4.76%
• DSCR: 0.79
• 1% rule: 0.61%
• Cash to close: $110,600

Investor read

• This is a 4-bed/2.5-bath single-family listed at $395k.
• At list price, monthly cash flow is $-439 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $317k (19.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $240k (39.4% below list).
• It's been on market 42 days — a 3% lower offer ($383k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $240k (39.4% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($3k loan paydown + $3k appreciation (0.9% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Heber-Overgaard Unified District (4392) (rural): math 52% / reading 45% proficiency, ranked #51 of 249 in AZ (top 20%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Mountain Meadows Primary (math 70% / reading 50%, grade B-, #148 of 1,109 statewide, top 15%, 143 students, 43% FRL); Mogollon Jr High School (math 42% / reading 32%, grade F, #57 of 218 statewide, top 27%, 77 students, 0% FRL); Mogollon High School (math 30% / reading 30%, grade F, #116 of 381 statewide, top 31%, 167 students, 32% FRL) — zoned schools average 25% FRL vs 50% district-wide (25 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: 157 active listings in the ZIP; 485 units permitted in Navajo County in 2024 (11 in 5+ unit buildings).
• Navajo County population projected at -16% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 7 sale attempts since 17y 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 $312k; 26% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 6, paydown + projected appreciation supports a ~$35k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; severe wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.0% vs local median 3.2% in Heber-Overgaard — 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?
• It's been on market 42 days. Have you received any prior offers? Is the seller open to a 39% 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.
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.