229-45 Shady Ln

El Cajon, CA 92021

$13,900,000D

None bd · 4602.0 ba · 48,150 sqft · Built — · MultiFamily · Active · 62 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $121,884/mo
• Mortgage (P&I): −$72,893
• Tax + insurance: −$23,167
• HOA: −$0
• Vac / Maint / Mgmt: −$25,596
• Net cashflow: $229/mo
• Annual: $2,743/yr
• Cap rate: 6.31%
• Cash-on-cash: 0.07%
• DSCR: 1.00
• 1% rule: 0.88%
• Cash to close: $3,892,000

Investor read

• This is a 24×1bd/1ba + 16×2bd/1ba + 12×2bd/2ba units multifamily listed at $13.90M. Condition is rated good.
• At list price, monthly cash flow is $229 ($3k/yr) — positive. Per door: $4/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $12.19M (12.3% below list).
• It's been on market 62 days — a 6% lower offer ($13.07M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $12.19M (12.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $96k of loan paydown is wiped out by about $417k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#230 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+; Watch: health & safety C-, crime D+, cost of living F.
• Grossmont Union High (suburban): math 31% / reading 60% proficiency, ranked #173 of 517 in CA (top 34%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 17% free/reduced lunch — higher-income household profile.
• Market conditions: Rents soft (-0.8%/yr); 244 active listings in the ZIP; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.3% vs local median 2.4% in El Cajon — 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 $121,884/mo this rent would consume 1976% of the median local household income ($74k/yr) (locally 4178% 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 62 days. Have you received any prior offers? Is the seller open to a 12% 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?
• 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.
• 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.