2320 Michael St

Bakersfield, CA 93307

$387,000C-

2 bd · 1.0 ba · 2,148 sqft · Built 1980 · MultiFamily · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,657/mo
• Mortgage (P&I): −$2,029
• Tax + insurance: −$518
• HOA: −$0
• Vac / Maint / Mgmt: −$768
• Net cashflow: $341/mo
• Annual: $4,096/yr
• Cap rate: 7.35%
• Cash-on-cash: 3.78%
• DSCR: 1.17
• 1% rule: 0.94%
• Cash to close: $108,360

Investor read

• This is a 2 × 3-bed/1.0-bath units multifamily listed at $387k.
• At list price, monthly cash flow is $341 ($4k/yr) — positive. Per door: $171/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $366k (5.5% below list).
• It's been on market 70 days — a 6% lower offer ($364k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $364k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 58/100 on livability (#716 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: health & safety D, schools D-, crime F.
• Kern High (urban): math 21% / reading 51% proficiency, ranked #860 of 1,400 in CA (top 61%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+5.7%/yr); 311 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 3,244 units permitted in Kern County in 2024 (73 in 5+ unit buildings).
• Kern County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 35y 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.
• Current owner paid $115k; list at $387k implies a 237% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: 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 7.4% vs local median 3.6% in Bakersfield — 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 $3,657/mo this rent would consume 78% of the median local household income ($56k/yr) (locally 3246% 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 70 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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.