15500 Bubbling Wells Rd #127

Garnet, CA 92240

$39,900C-

2 bd · 2.0 ba · 1,152 sqft · Built 1980 · Manufactured · Active · 138 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,330/mo
• Mortgage (P&I): −$209
• Tax + insurance: −$155
• HOA: −$877
• Vac / Maint / Mgmt: −$489
• Net cashflow: $600/mo
• Annual: $7,194/yr
• Cap rate: 28.00%
• Cash-on-cash: 77.53%
• DSCR: 4.45
• 1% rule: 5.84%
• Cash to close: $11,172

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $40k.
• At list price, monthly cash flow is $600 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $40k).
• It's been on market 138 days — a 12% lower offer ($35k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $35k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $276 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 53/100 on livability (#971 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: cost of living D, crime F, amenities F.
• Palm Springs Unified (suburban): math 21% / reading 42% proficiency, ranked #328 of 517 in CA (top 63%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 73% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Bubbling Wells Elementary (665 students, 97% FRL); Desert Springs Middle (803 students, 99% FRL); Desert Hot Springs High (math 27% / reading 52%, grade F, #532 of 1,170 statewide, top 48%, 1,742 students, 98% FRL) — zoned schools average 98% FRL vs 73% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: flood insurance adds $122/mo; HOA is 38% of rent.
• Market conditions: Rents rising (+3.7%/yr); 521 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 64% of comp listings sitting > 30 days — soft ceiling on asking rent; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 19y ago; this cycle's ask has dropped $22k (36%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 3.7% rent growth), your $11k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance); moderate wildfire risk; extreme-heat days projected 2→6/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 28.0% vs local median 5.8% in Garnet — 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.
• At $2,330/mo this rent would consume 52% of the median local household income ($54k/yr) (locally 2095% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 138 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.