1388 Gough St #601

San Francisco, CA 94109

$899,000D

2 bd · 2.0 ba · 1,382 sqft · Built 1993 · Condo · Active · 101 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,043/mo
• Mortgage (P&I): −$4,714
• Tax + insurance: −$1,478
• HOA: −$2,041
• Vac / Maint / Mgmt: −$1,269
• Net cashflow: $-3,460/mo
• Annual: $-41,515/yr
• Cap rate: 1.68%
• Cash-on-cash: -16.49%
• DSCR: 0.27
• 1% rule: 0.67%
• Cash to close: $251,720

Investor read

• This is a 2-bed/2.0-bath condo listed at $899k.
• At list price, monthly cash flow is $-3k ($-42k/yr) — negative.
• To cash-flow at today's rent, offer at most $288k (68.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $604k (32.8% below list).
• It's been on market 101 days — a 9% lower offer ($818k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $288k (68.0% below list) — sets the bar for cash-flow.
• In year one you build about $51k of equity ($6k loan paydown + $45k appreciation (5.0% local appreciation)).
• Location reads 76/100 on livability (#90 in CA, #3,143 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• San Francisco Unified (urban): math 50% / reading 56% proficiency, ranked #322 of 1,400 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lilienthal (Claire) Elementary (669 students, 19% FRL); Giannini (A.P.) Middle (1,192 students, 34% FRL); Lowell High (2,632 students, 37% FRL) — zoned schools average 30% FRL vs 49% district-wide (19 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: HOA is 34% of rent.
• Market conditions: Rents rising fast (+15.6%/yr); 165 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 13d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 750 units permitted in San Francisco County in 2024 (688 in 5+ unit buildings).
• San Francisco County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 22y ago; this cycle's ask has dropped $101k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• By year 2, paydown + projected appreciation supports a ~$82k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 1.7% vs local median 2.1% in San Francisco — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $6,043/mo this rent would consume 68% of the median local household income ($106k/yr) (locally 5272% 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 101 days. Have you received any prior offers? Is the seller open to a 68% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?