609 Rancheria

Chico, CA 95926

$1,285,000D

15 bd · 10.0 ba · 6,800 sqft · Built 1968 · MultiFamily · Active · 202 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,239/mo
• Mortgage (P&I): −$6,739
• Tax + insurance: −$1,300
• HOA: −$0
• Vac / Maint / Mgmt: −$1,940
• Net cashflow: $-740/mo
• Annual: $-8,881/yr
• Cap rate: 5.60%
• Cash-on-cash: -2.47%
• DSCR: 0.89
• 1% rule: 0.72%
• Cash to close: $359,800

Investor read

• This is a 5 × 3-bed/2.0-bath units multifamily listed at $1.28M.
• At list price, monthly cash flow is $-740 ($-9k/yr) — negative. Per door: $-148/mo.
• To cash-flow at today's rent, offer at most $1.15M (10.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $924k (28.1% below list).
• It's been on market 202 days — a 12% lower offer ($1.13M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $924k (28.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $39k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#195 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A-; Watch: employment C-, crime F, cost of living F.
• Chico Unified (urban): math 40% / reading 70% proficiency, ranked #117 of 517 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Rosedale Elementary (543 students, 53% FRL); Chico Junior High (928 students, 63% FRL); Chico High (math 39% / reading 78%, grade C, #223 of 1,170 statewide, top 19%, 1,905 students, 52% FRL).
• Market conditions: Rents rising (+4.0%/yr); 92 active listings in the ZIP; 946 units permitted in Butte County in 2024 (254 in 5+ unit buildings).
• Butte County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 10 sale attempts since 12y 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 $660k; list at $1.28M implies a 95% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 6→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 2.6% in Chico — 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 $9,239/mo this rent would consume 179% of the median local household income ($62k/yr) (locally 3912% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 202 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1968 — 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.
• Schools are B-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?