36740 Red Oak

French Valley, CA 92596

$582,000D

3 bd · 2.0 ba · 1,443 sqft · Built 2002 · SingleFamily · Active · 51 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,425/mo
• Mortgage (P&I): −$3,052
• Tax + insurance: −$524
• HOA: −$11
• Vac / Maint / Mgmt: −$719
• Net cashflow: $-881/mo
• Annual: $-10,570/yr
• Cap rate: 4.48%
• Cash-on-cash: -6.49%
• DSCR: 0.71
• 1% rule: 0.59%
• Cash to close: $162,960

Investor read

• This is a 3-bed/2.0-bath single-family listed at $582k.
• At list price, monthly cash flow is $-881 ($-11k/yr) — negative.
• To cash-flow at today's rent, offer at most $426k (26.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $343k (41.1% below list).
• It's been on market 51 days — a 3% lower offer ($565k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $343k (41.1% below list) — sets the bar for 1% rule.
• In year one you build about $62k of equity ($4k loan paydown + $58k appreciation (10.0% local appreciation)).
• Location reads 59/100 on livability (#655 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+, housing A+; Watch: crime D-, amenities F, commute F.
• Temecula Valley Unified (urban): math 55% / reading 69% proficiency, ranked #173 of 1,400 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: French Valley Elementary (880 students, 24% FRL); Bella Vista Middle (1,396 students, 26% FRL); Chaparral High (3,030 students, 27% FRL).
• Market conditions: Rents soft (-0.8%/yr); 353 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 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.
• Current owner paid $188k; list at $582k implies a 210% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$100k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 5→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.5% vs local median 3.5% in French Valley — meaningfully above typical; check what's discounted (condition, days-on-market, listing class) to confirm the premium yield is real.
• This rent runs 31% of the median local income ($133k/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 51 days. Have you received any prior offers? Is the seller open to a 41% 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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?
• 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.