1107 N Commerce St

Stockton, CA 95202

$699,900C+

12 bd · 36.0 ba · 3,385 sqft · Built 1900 · MultiFamily · Pending · 35 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,396/mo
• Mortgage (P&I): −$3,670
• Tax + insurance: −$695
• HOA: −$0
• Vac / Maint / Mgmt: −$1,973
• Net cashflow: $3,058/mo
• Annual: $36,695/yr
• Cap rate: 11.54%
• Cash-on-cash: 18.72%
• DSCR: 1.83
• 1% rule: 1.34%
• Cash to close: $195,972

Investor read

• This is a 6 × 4-bed/4.0-bath units multifamily listed at $700k.
• At list price, monthly cash flow is $3k ($37k/yr) — positive. Per door: $510/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $700k).
• It's been on market 35 days — a 3% lower offer ($679k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $679k (3.0% below list) — sets the bar for market timing.
• In year one you build about $10k of equity ($5k loan paydown + $5k appreciation (0.7% local appreciation)).
• Location reads 57/100 on livability (#734 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+, health & safety A, amenities A-; Watch: employment C-, schools D-, crime F.
• Stockton Unified (urban): math 23% / reading 46% proficiency, ranked #295 of 517 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1900 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 24 active listings in the ZIP; lower-income renter base — watch delinquency; 3,779 units permitted in San Joaquin County in 2024 (0 in 5+ unit buildings).
• San Joaquin County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $375k; list at $700k implies a 87% gain — meaningful room to come down on a strong offer.
• At projected returns (0.7% appreciation + 3.0% rent growth), your $196k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$47k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.5% vs local median 3.6% in Stockton — 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 $9,396/mo this rent would consume 363% of the median local household income ($31k/yr) (locally 837% 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 35 days. Have you received any prior offers? Is the seller open to a 3% 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 1900 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.