10770 Katella #19

Garden Grove, CA 92804

$329,900D

3 bd · 2.0 ba · 1,440 sqft · Built 1975 · Manufactured · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,265/mo
• Mortgage (P&I): −$1,730
• Tax + insurance: −$550
• HOA: −$0
• Vac / Maint / Mgmt: −$686
• Net cashflow: $299/mo
• Annual: $3,591/yr
• Cap rate: 7.38%
• Cash-on-cash: 3.89%
• DSCR: 1.17
• 1% rule: 0.99%
• Cash to close: $92,372

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $330k.
• At list price, monthly cash flow is $299 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $326k (1.0% below list).
• It's been on market 21 days — a 2% lower offer ($325k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $325k (1.5% 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 $10k of value loss. Plan a longer hold.
• Location reads 66/100 on livability (#343 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A; Watch: schools C-, amenities D+, cost of living F.
• Garden Grove Unified (suburban): math 38% / reading 65% proficiency, ranked #132 of 517 in CA (top 26%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; 60% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents flat; 86 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 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.
• 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 7.4% vs local median 1.8% in Garden Grove — 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 $3,265/mo this rent would consume 51% of the median local household income ($76k/yr) (locally 5698% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1975 — 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.
• 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.
• 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.