14025 Spruce

Hesperia, CA 92345

$935,000D

8 bd · 8.0 ba · 4,216 sqft · Built 1984 · MultiFamily · Active · 115 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,454/mo
• Mortgage (P&I): −$4,903
• Tax + insurance: −$676
• HOA: −$0
• Vac / Maint / Mgmt: −$1,775
• Net cashflow: $1,100/mo
• Annual: $13,195/yr
• Cap rate: 7.70%
• Cash-on-cash: 5.04%
• DSCR: 1.22
• 1% rule: 0.90%
• Cash to close: $261,800

Investor read

• This is a 4 × 2-bed/2.0-bath units multifamily listed at $935k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $275/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $845k (9.6% below list).
• It's been on market 115 days — a 9% lower offer ($851k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $845k (9.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $28k of value loss. Plan a longer hold.
• Location reads 52/100 on livability (#1,009 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: employment D, schools F, crime D-.
• Hesperia Unified (suburban): math 20% / reading 39% proficiency, ranked #353 of 517 in CA (top 68%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 61% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+2.9%/yr); 463 active listings in the ZIP; 5,458 units permitted in San Bernardino County in 2024 (1,500 in 5+ unit buildings).
• San Bernardino County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts 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 $160k; list at $935k implies a 484% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 3.7% in Hesperia — 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 $8,454/mo this rent would consume 146% of the median local household income ($69k/yr) (locally 2768% 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 115 days. Have you received any prior offers? Is the seller open to a 10% 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?
• 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?
• Crime grade is D 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?