1426 E 16th St

National City, CA 91950

$1,150,000D-

5 bd · 5.0 ba · 2,200 sqft · Built 1955 · MultiFamily · Pending · 41 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,632/mo
• Mortgage (P&I): −$6,031
• Tax + insurance: −$1,326
• HOA: −$0
• Vac / Maint / Mgmt: −$2,023
• Net cashflow: $252/mo
• Annual: $3,028/yr
• Cap rate: 6.56%
• Cash-on-cash: 0.94%
• DSCR: 1.04
• 1% rule: 0.84%
• Cash to close: $322,000

Investor read

• This is a 5 × 1-bed/1-bath units multifamily listed at $1.15M.
• At list price, monthly cash flow is $252 ($3k/yr) — positive. Per door: $50/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 $963k (16.2% below list).
• It's been on market 41 days — a 3% lower offer ($1.12M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $963k (16.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $34k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#430 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+; Watch: crime F, cost of living F, health & safety F.
• Sweetwater Union High (suburban): math 36% / reading 52% proficiency, ranked #187 of 517 in CA (top 36%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: National City Middle (math 20% / reading 38%, grade F, #224 of 498 statewide, top 46%, 698 students, 93% FRL); Sweetwater High (math 26% / reading 49%, grade F, #576 of 1,170 statewide, top 49%, 2,679 students, 89% FRL) — zoned schools average 91% FRL vs 53% district-wide (38 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.8%/yr); 55 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• Cap rate 6.6% vs local median 3.2% in National City — 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 $9,632/mo this rent would consume 174% of the median local household income ($66k/yr) (locally 3672% 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 41 days. Have you received any prior offers? Is the seller open to a 16% 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 1955 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-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 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?
• 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?