2641 Niles St

Hillcrest, CA 93305

$550,000C

None bd · None ba · 3,320 sqft · Built 1960 · MultiFamily · Pending · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,547/mo
• Mortgage (P&I): −$2,884
• Tax + insurance: −$1,126
• HOA: −$0
• Vac / Maint / Mgmt: −$1,375
• Net cashflow: $1,162/mo
• Annual: $13,948/yr
• Cap rate: 8.83%
• Cash-on-cash: 9.06%
• DSCR: 1.40
• 1% rule: 1.19%
• Cash to close: $154,000

Investor read

• This is a multifamily listed at $550k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($7k rent vs $550k).
• It's been on market 83 days — a 6% lower offer ($517k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $517k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $16k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Kern High (urban): math 21% / reading 51% proficiency, ranked #860 of 1,400 in CA (top 61%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Horace Mann Elementary (845 students, 93% FRL); Paul L. Cato Middle (629 students, 57% FRL); East Bakersfield High (reading 75%, 2,421 students, 89% FRL).
• Market conditions: Rents rising fast (+6.8%/yr); 144 active listings in the ZIP; 1 comparable units currently listed for rent nearby; lower-income renter base — watch delinquency; 3,244 units permitted in Kern County in 2024 (73 in 5+ unit buildings).
• Kern County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 13 sale attempts since 21y 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 $442k; 24% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 6.8% rent growth), your $154k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.8% vs local median 3.8% in Hillcrest — 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 $6,547/mo this rent would consume 182% of the median local household income ($43k/yr) (locally 2376% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 83 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1960 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.