6525 N Lost Dutchman Dr

Paradise Valley, AZ 85253

$8,250,000D

6 bd · 9.0 ba · 9,751 sqft · Built 1998 · SingleFamily · Active · 62 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,845/mo
• Mortgage (P&I): −$43,264
• Tax + insurance: −$5,129
• HOA: −$0
• Vac / Maint / Mgmt: −$1,017
• Net cashflow: $-44,566/mo
• Annual: $-534,787/yr
• Cap rate: -0.19%
• Cash-on-cash: -23.15%
• DSCR: -0.03
• 1% rule: 0.06%
• Cash to close: $2,310,000

Investor read

• This is a 6-bed/9.0-bath single-family listed at $8.25M.
• At list price, monthly cash flow is $-45k ($-535k/yr) — negative.
• To cash-flow at today's rent, offer at most $406k (95.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $484k (94.1% below list).
• It's been on market 62 days — a 6% lower offer ($7.75M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $406k (95.1% below list) — sets the bar for cash-flow.
• In year one you build about $882k of equity ($57k loan paydown + $825k appreciation (10.0% local appreciation)).
• Location reads 63/100 on livability (#123 in AZ) — a middle-class / working-renter tenant base. Strengths: schools A+, crime A+, employment A+; Watch: commute D, amenities F, cost of living F.
• Scottsdale Unified District (4240) (urban): math 53% / reading 55% proficiency, ranked #30 of 249 in AZ (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+8.6%/yr); 349 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 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 since 16y ago; this cycle's ask has dropped $750k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $1.26M; list at $8.25M implies a 553% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$1.42M cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• This rent runs 31% of the median local income ($185k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 62 days. Have you received any prior offers? Is the seller open to a 95% concession, seller financing, or rate buy-down credit?
• 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.
• 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.