2701 Double O Rd

Borrego Springs, CA 92004

$325,000B-

4 bd · 2.0 ba · 1,688 sqft · Built 1992 · MultiFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,083/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$434
• HOA: −$0
• Vac / Maint / Mgmt: −$857
• Net cashflow: $1,088/mo
• Annual: $13,053/yr
• Cap rate: 10.76%
• Cash-on-cash: 15.96%
• DSCR: 1.71
• 1% rule: 1.26%
• Cash to close: $91,000

Investor read

• This is a 4-bed/2.0-bath multifamily listed at $325k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $325k).
• It's been on market 48 days — a 3% lower offer ($315k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $315k (3.0% 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 $10k of value loss. Plan a longer hold.
• Location reads 58/100 on livability (#712 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+, housing A+; Watch: schools F, amenities F, commute F.
• Borrego Springs Unified (rural): math 20% / reading 35% proficiency, ranked #1,120 of 1,400 in CA (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: flood insurance adds $122/mo.
• Market conditions: 172 active listings in the ZIP; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $91k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance); extreme-heat days projected 9→27/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.8% vs local median 6.0% in Borrego Springs — 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

• It's been on market 48 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.