2140 San Bernardo Ave

Hemet, CA 92545

$222,000D

2 bd · 1.0 ba · 827 sqft · Built 1975 · SingleFamily · Active · 402 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,777/mo
• Mortgage (P&I): −$1,164
• Tax + insurance: −$176
• HOA: −$3
• Vac / Maint / Mgmt: −$373
• Net cashflow: $61/mo
• Annual: $733/yr
• Cap rate: 6.62%
• Cash-on-cash: 1.18%
• DSCR: 1.05
• 1% rule: 0.80%
• Cash to close: $62,160

Investor read

• This is a 2-bed/1.0-bath single-family listed at $222k.
• At list price, monthly cash flow is $61 ($733/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 $178k (20.0% below list).
• It's been on market 402 days — a 12% lower offer ($195k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $178k (20.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,056 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: crime D+, amenities F, commute F.
• Hemet Unified (suburban): math 19% / reading 41% proficiency, ranked #360 of 517 in CA (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Fruitvale Elementary (805 students, 88% FRL); Rancho Viejo Middle (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 975 students, 88% FRL); Tahquitz High (math 14% / reading 42%, grade F, #777 of 1,170 statewide, top 67%, 1,727 students, 88% FRL) — zoned schools average 88% FRL vs 66% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+3.7%/yr); 292 active listings in the ZIP; 35 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 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 19y ago; this cycle's ask has dropped $28k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $56k; list at $222k implies a 296% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.6% vs local median 4.8% in Hemet — 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.
• This rent runs 33% of the median local income ($64k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 402 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1975 — 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?
• 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 F-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 D 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?
• 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?