1875 Cherokee Dr #4

Salinas, CA 93906

$299,000D

3 bd · 1.5 ba · 952 sqft · Built 1984 · Condo · Pending · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,989/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$283
• HOA: −$595
• Vac / Maint / Mgmt: −$628
• Net cashflow: $-85/mo
• Annual: $-1,016/yr
• Cap rate: 5.95%
• Cash-on-cash: -1.21%
• DSCR: 0.95
• 1% rule: 1.00%
• Cash to close: $83,720

Investor read

• This is a 3-bed/1.5-bath condo listed at $299k.
• At list price, monthly cash flow is $-85 ($-1k/yr) — negative.
• To cash-flow at today's rent, offer at most $284k (5.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $299k (0.0% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $284k (5.0% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#465 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, health & safety A+, employment B+; Watch: schools F, crime D-, amenities F.
• Salinas Union High (urban): math 23% / reading 39% proficiency, ranked #998 of 1,400 in CA (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+4.9%/yr); 45 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals leasing fast (median 14d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 530 units permitted in Monterey County in 2024 (50 in 5+ unit buildings).
• Monterey County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $82k; list at $299k implies a 267% gain — meaningful room to come down on a strong offer.
• Cap rate 6.0% vs local median 2.7% in Salinas — 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 37% of the median local income ($98k/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?
• 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?
• 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?
• 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.