76 Calle Aragon Unit S

Laguna Woods, CA 92637

$299,000D

2 bd · 2.0 ba · 1,009 sqft · Built 1964 · Condo · Active · 141 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,962/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$498
• HOA: −$826
• Vac / Maint / Mgmt: −$622
• Net cashflow: $-552/mo
• Annual: $-6,626/yr
• Cap rate: 4.08%
• Cash-on-cash: -7.91%
• DSCR: 0.65
• 1% rule: 0.99%
• Cash to close: $83,720

Investor read

• This is a 2-bed/2.0-bath condo listed at $299k.
• At list price, monthly cash flow is $-552 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $219k (26.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $296k (0.9% below list).
• It's been on market 141 days — a 12% lower offer ($263k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $219k (26.7% below list) — sets the bar for cash-flow.
• In year one you build about $20k of equity ($2k loan paydown + $18k appreciation (5.9% local appreciation)).
• Location reads 72/100 on livability (#200 in CA) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+; Watch: schools C-, amenities D+, cost of living F.
• Saddleback Valley Unified (suburban): math 51% / reading 73% proficiency, ranked #67 of 517 in CA (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: HOA is 28% of rent.
• Market conditions: Rents rising fast (+6.8%/yr); 191 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 5y ago; this cycle's ask has dropped $61k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $218k; 37% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$31k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.1% vs local median 2.4% in Laguna Woods — 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 $2,962/mo this rent would consume 60% of the median local household income ($59k/yr) (locally 1572% 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 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 141 days. Have you received any prior offers? Is the seller open to a 27% concession, seller financing, or rate buy-down credit?
• Built in 1964 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?