601 East Ave

Carrizozo, NM 88301

$150,000D+

3 bd · 1.5 ba · 1,642 sqft · Built 1940 · Other · Active · 311 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,207/mo
• Mortgage (P&I): −$787
• Tax + insurance: −$249
• HOA: −$0
• Vac / Maint / Mgmt: −$254
• Net cashflow: $-82/mo
• Annual: $-983/yr
• Cap rate: 6.64%
• Cash-on-cash: 1.24%
• DSCR: 1.05
• 1% rule: 0.80%
• Cash to close: $42,000

Investor read

• This is a 3-bed/1.5-bath other listed at $150k.
• At list price, monthly cash flow is $-82 ($-983/yr) — negative.
• To cash-flow at today's rent, offer at most $136k (9.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $121k (19.5% below list).
• It's been on market 311 days — a 12% lower offer ($132k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $121k (19.5% below list) — sets the bar for 1% rule.
• In year one you build about $4k of equity ($1k loan paydown + $3k appreciation (2.2% local appreciation)).
• Location reads 60/100 on livability (#106 in NM) — a middle-class / working-renter tenant base. Strengths: cost of living A+, health & safety A+; Watch: amenities D+, housing D, schools F.
• Carrizozo Municipal Schools (rural): math 25% / reading 75% proficiency, ranked #11 of 29 in NM (top 38%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $125/mo; built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 54 active listings in the ZIP; 92 units permitted in Lincoln County in 2024 (0 in 5+ unit buildings).
• Lincoln County population projected at -35% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 6y ago; this cycle's ask has dropped $20k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (2.2% appreciation + 3.0% rent growth), your $42k cash investment doubles in ~9 years — after that, you're playing with house money.
• By year 8, paydown + projected appreciation supports a ~$33k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone A (mandatory federal flood insurance); moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.

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 311 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1940 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?