736 Terrace Lake Dr #324

Brea, CA 92821

$239,900C

2 bd · 1.0 ba · 1,155 sqft · Built 1980 · Manufactured · Active · 80 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,836/mo
• Mortgage (P&I): −$1,258
• Tax + insurance: −$400
• HOA: −$0
• Vac / Maint / Mgmt: −$596
• Net cashflow: $583/mo
• Annual: $6,993/yr
• Cap rate: 9.21%
• Cash-on-cash: 10.41%
• DSCR: 1.46
• 1% rule: 1.18%
• Cash to close: $67,172

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $240k.
• At list price, monthly cash flow is $583 ($7k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $240k).
• It's been on market 80 days — a 6% lower offer ($226k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $226k (6.0% 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 $7k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#100 in CA, #3,570 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, employment A+, commute A-; Watch: health & safety C-, cost of living F.
• Fullerton Joint Union High (suburban): math 51% / reading 66% proficiency, ranked #82 of 517 in CA (top 16%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Ladera Palma Elementary (572 students, 67% FRL); Washington Middle (605 students, 82% FRL).
• Market conditions: Rents rising (+1.8%/yr); 67 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 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; this cycle's ask has dropped $244.66M (100%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 2.1% in Brea — 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 80 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• 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 A-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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.