22840 Sterling Ave #87

Palm Springs, CA 92262

$125,000B

3 bd · 2.0 ba · 1,056 sqft · Built 2004 · Manufactured · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,837/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$214
• HOA: −$0
• Vac / Maint / Mgmt: −$596
• Net cashflow: $1,372/mo
• Annual: $16,465/yr
• Cap rate: 20.67%
• Cash-on-cash: 51.34%
• DSCR: 3.28
• 1% rule: 2.27%
• Cash to close: $35,000

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $125k.
• At list price, monthly cash flow is $1k ($16k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $125k).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $864 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#348 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+; Watch: schools C-, crime F, cost of living 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.
• Watch-outs: flood insurance adds $125/mo.
• Market conditions: Rents flat; 662 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 3 sale attempts since 4y 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.
• At projected returns (-3.0% appreciation + 0.5% rent growth), your $35k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone A (mandatory federal flood insurance); major wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 20.7% vs local median 2.7% in Palm 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.
• At $2,837/mo this rent would consume 48% of the median local household income ($72k/yr) (locally 1866% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.
• 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.