25422 Sea Bluffs Dr #204

Dana Point, CA 92629

$539,000C

2 bd · 2.0 ba · 1,373 sqft · Built 1997 · Condo · Active · 70 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,768/mo
• Mortgage (P&I): −$2,827
• Tax + insurance: −$387
• HOA: −$670
• Vac / Maint / Mgmt: −$1,001
• Net cashflow: $-116/mo
• Annual: $-1,397/yr
• Cap rate: 6.03%
• Cash-on-cash: -0.93%
• DSCR: 0.96
• 1% rule: 0.88%
• Cash to close: $150,920

Investor read

• This is a 2-bed/2.0-bath condo listed at $539k.
• At list price, monthly cash flow is $-116 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $518k (3.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $477k (11.5% below list).
• It's been on market 70 days — a 6% lower offer ($507k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $477k (11.5% below list) — sets the bar for 1% rule.
• In year one you build about $48k of equity ($4k loan paydown + $45k appreciation (8.3% local appreciation)).
• Location reads 65/100 on livability (#398 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, health & safety A+; Watch: amenities F, cost of living F.
• Capistrano Unified (suburban): math 50% / reading 72% proficiency, ranked #64 of 517 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 19% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising fast (+4.2%/yr); 85 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 18d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 3 sale attempts since 14y 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 $461k; 17% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$77k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 6→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 1.4% in Dana Point — 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.
• This rent runs 40% of the median local income ($143k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 70 days. Have you received any prior offers? Is the seller open to a 12% 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.
• 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.