204 N Chorro St

San Luis Obispo, CA 93405

$14,750,000C

2100 bd · 1225.0 ba · 26,672 sqft · Built 1953 · MultiFamily · Active · 147 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $164,596/mo
• Mortgage (P&I): −$77,351
• Tax + insurance: −$24,583
• HOA: −$0
• Vac / Maint / Mgmt: −$34,565
• Net cashflow: $28,097/mo
• Annual: $337,163/yr
• Cap rate: 8.58%
• Cash-on-cash: 8.16%
• DSCR: 1.36
• 1% rule: 1.12%
• Cash to close: $4,130,000

Investor read

• This is a 35 × 60-bed/?-bath units multifamily listed at $14.75M. Condition is rated good.
• At list price, monthly cash flow is $28k ($337k/yr) — positive. Per door: $803/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($165k rent vs $14.75M).
• It's been on market 147 days — a 12% lower offer ($12.98M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $12.98M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $102k of loan paydown is wiped out by about $442k of value loss. Plan a longer hold.
• Location reads 74/100 on livability (#132 in CA, #4,576 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A+; Watch: crime F, cost of living F.
• San Luis Coastal Unified (urban): math 50% / reading 58% proficiency, ranked #118 of 517 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.0%/yr); 51 active listings in the ZIP; 1,104 units permitted in San Luis Obispo County in 2024 (273 in 5+ unit buildings).
• San Luis Obispo County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 7.0% rent growth), your $4.13M cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% vs local median 2.1% in San Luis Obispo — 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 $164,596/mo this rent would consume 3270% of the median local household income ($60k/yr) (locally 3368% 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 147 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?
• Built in 1953 — 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?
• Crime grade is F 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?