187 - 189 E Hillcrest Dr

North Auburn, CA 95603

$625,000F

2 bd · 1.0 ba · 1,800 sqft · Built 1976 · MultiFamily · Active · 71 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,384/mo
• Mortgage (P&I): −$3,278
• Tax + insurance: −$665
• HOA: −$0
• Vac / Maint / Mgmt: −$921
• Net cashflow: $-479/mo
• Annual: $-5,748/yr
• Cap rate: 5.37%
• Cash-on-cash: -3.28%
• DSCR: 0.85
• 1% rule: 0.70%
• Cash to close: $175,000

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $625k.
• At list price, monthly cash flow is $-479 ($-6k/yr) — negative. Per door: $-239/mo.
• To cash-flow at today's rent, offer at most $540k (13.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $438k (29.9% below list).
• It's been on market 71 days — a 6% lower offer ($588k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $438k (29.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#519 in CA) — a middle-class / working-renter tenant base. Strengths: employment A-, housing A-; Watch: schools F, crime D-, amenities F.
• Placer Union High (suburban): math 39% / reading 72% proficiency, ranked #98 of 517 in CA (top 19%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+2.3%/yr); 204 active listings in the ZIP; solid renter incomes; 3,535 units permitted in Placer County in 2024 (689 in 5+ unit buildings).
• Placer County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $220k; list at $625k implies a 184% gain — meaningful room to come down on a strong offer.
• 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 5.4% vs local median 2.6% in North Auburn — 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 $4,384/mo this rent would consume 62% of the median local household income ($85k/yr) (locally 1017% 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 71 days. Have you received any prior offers? Is the seller open to a 30% 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?
• Built in 1976 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?