3505 Spring St

El Paso de Robles (Paso Robles), CA 93446

$1,900,000B-

50 bd · 120.0 ba · 5,000 sqft · Built 1968 · MultiFamily · Active · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $29,468/mo
• Mortgage (P&I): −$9,964
• Tax + insurance: −$2,213
• HOA: −$0
• Vac / Maint / Mgmt: −$6,188
• Net cashflow: $11,103/mo
• Annual: $133,236/yr
• Cap rate: 13.31%
• Cash-on-cash: 25.04%
• DSCR: 2.11
• 1% rule: 1.55%
• Cash to close: $532,000

Investor read

• This is a 10 × 5-bed/?-bath units multifamily listed at $1.90M.
• At list price, monthly cash flow is $11k ($133k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($29k rent vs $1.90M).
• It's been on market 23 days — a 2% lower offer ($1.87M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.87M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $13k of loan paydown is wiped out by about $57k of value loss. Plan a longer hold.
• Location reads: area grade B — affects rentability + tenant quality, not the cash-flow math above.
• Paso Robles Joint Unified (urban): math 28% / reading 52% proficiency, ranked #224 of 517 in CA (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Georgia Brown Dual Immersion Magnet Elementary (624 students, 65% FRL); George H. Flamson Middle (653 students, 69% FRL); Paso Robles High (math 32% / reading 59%, grade D-, #417 of 1,170 statewide, top 36%, 2,093 students, 61% FRL) — zoned schools average 65% FRL vs 43% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents soft (-1.2%/yr); 311 active listings in the ZIP; solid renter incomes; 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.
• 14 sale attempts since 19y 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 $1.51M; 26% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $532k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.3% vs local median 1.8% in El Paso de Robles (Paso Robles) — 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 $29,468/mo this rent would consume 361% of the median local household income ($98k/yr) (locally 1509% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• 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.