420 Cleveland Ave

Sacramento, CA 95833

$1,000,000B

1 bd · 3.0 ba · 1,764 sqft · Built 1949 · MultiFamily · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,362/mo
• Mortgage (P&I): −$5,244
• Tax + insurance: −$1,316
• HOA: −$0
• Vac / Maint / Mgmt: −$3,856
• Net cashflow: $7,946/mo
• Annual: $95,354/yr
• Cap rate: 15.98%
• Cash-on-cash: 34.59%
• DSCR: 2.54
• 1% rule: 1.84%
• Cash to close: $280,000

Investor read

• This is a 1-bed/3.0-bath multifamily listed at $1.00M.
• At list price, monthly cash flow is $8k ($95k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $1.00M).
• It's been on market 61 days — a 6% lower offer ($940k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $940k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $30k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#218 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A; Watch: crime F, cost of living F.
• Twin Rivers Unified (suburban): math 29% / reading 37% proficiency, ranked #970 of 1,400 in CA (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Woodlake Elementary (321 students, 94% FRL); Rio Tierra Junior High (292 students, 89% FRL); Grant Union High (2,040 students, 88% FRL).
• Watch-outs: flood insurance adds $125/mo; built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.8%/yr); 136 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $620k; list at $1.00M implies a 61% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.8% rent growth), your $280k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone A99 (mandatory federal flood insurance); extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 16.0% vs local median 3.0% in Sacramento — 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 $18,362/mo this rent would consume 225% of the median local household income ($98k/yr) (locally 1743% 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 61 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1949 — 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 D-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.