407 E St

Taft Heights, CA 93268

$228,000C

3 bd · 2.0 ba · 1,441 sqft · Built 1925 · MultiFamily · Active · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,854/mo
• Mortgage (P&I): −$1,196
• Tax + insurance: −$472
• HOA: −$0
• Vac / Maint / Mgmt: −$599
• Net cashflow: $587/mo
• Annual: $7,047/yr
• Cap rate: 9.38%
• Cash-on-cash: 11.04%
• DSCR: 1.49
• 1% rule: 1.25%
• Cash to close: $63,840

Investor read

• This is a 3-bed/2.0-bath multifamily listed at $228k.
• At list price, monthly cash flow is $587 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $228k).
• It's been on market 66 days — a 6% lower offer ($214k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $214k (6.0% below list) — sets the bar for market timing.
• 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 (#1,063 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+, crime B; Watch: schools F, amenities F, commute F.
• Taft City (town): math 28% / reading 39% proficiency, ranked #946 of 1,400 in CA (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1925 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+13.6%/yr); 122 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); 3,244 units permitted in Kern County in 2024 (73 in 5+ unit buildings).
• Kern County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 28y ago 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.
• Current owner paid $190k; 20% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $64k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 1→2/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $2,854/mo this rent would consume 59% of the median local household income ($58k/yr) (locally 819% 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 66 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1925 — 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.