318 Obrien

Gridley, CA 95948

$125,000D+

1 bd · 1.0 ba · 500 sqft · Built 1980 · Other · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,150/mo
• Mortgage (P&I): −$656
• Tax + insurance: −$156
• HOA: −$0
• Vac / Maint / Mgmt: −$242
• Net cashflow: $97/mo
• Annual: $1,168/yr
• Cap rate: 7.23%
• Cash-on-cash: 3.34%
• DSCR: 1.15
• 1% rule: 0.92%
• Cash to close: $35,000

Investor read

• This is a 1-bed/1.0-bath other listed at $125k.
• At list price, monthly cash flow is $97 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $115k (8.0% below list).
• It's been on market 15 days — a 2% lower offer ($123k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $115k (8.0% below list) — sets the bar for 1% rule.
• 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 59/100 on livability (#644 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: crime C-, schools D+, cost of living D.
• Manzanita Elementary (rural): math 54% / reading 55% proficiency, ranked #353 of 1,400 in CA (top 25%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: 47 active listings in the ZIP; 946 units permitted in Butte County in 2024 (254 in 5+ unit buildings).
• Butte County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts 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.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.2% vs local median 3.0% in Gridley — 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.

Questions for listing agent

• 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?
• 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?
• 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.