1602 87th Ave

Oakland, CA 94621

$597,000D

4 bd · 3.0 ba · 2,302 sqft · Built 1930 · MultiFamily · Active · 34 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,796/mo
• Mortgage (P&I): −$3,131
• Tax + insurance: −$1,129
• HOA: −$0
• Vac / Maint / Mgmt: −$1,007
• Net cashflow: $-471/mo
• Annual: $-5,652/yr
• Cap rate: 5.35%
• Cash-on-cash: -3.38%
• DSCR: 0.85
• 1% rule: 0.80%
• Cash to close: $167,160

Investor read

• This is a 4-bed/3.0-bath multifamily listed at $597k.
• At list price, monthly cash flow is $-471 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $514k (13.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $480k (19.7% below list).
• It's been on market 34 days — a 3% lower offer ($579k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $480k (19.7% 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 $18k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#224 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: schools C-, crime F, cost of living F.
• Oakland Unified (urban): math 27% / reading 33% proficiency, ranked #1,007 of 1,400 in CA (top 72%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.5%/yr); 83 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; 1,742 units permitted in Alameda County in 2024 (856 in 5+ unit buildings).
• Alameda County population projected at +34% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 16y 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.
• Cap rate 5.3% vs local median 2.4% in Oakland — 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 $4,796/mo this rent would consume 111% of the median local household income ($52k/yr) (locally 2404% 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 34 days. Have you received any prior offers? Is the seller open to a 20% concession, seller financing, or rate buy-down credit?
• Built in 1930 — 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.
• 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.