2173 Aza Dr

Santa Clara, CA 95050

$2,790,000D+

96 bd · 64.0 ba · 5,640 sqft · Built 1959 · MultiFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $21,047/mo
• Mortgage (P&I): −$14,631
• Tax + insurance: −$2,533
• HOA: −$0
• Vac / Maint / Mgmt: −$4,420
• Net cashflow: $-537/mo
• Annual: $-6,449/yr
• Cap rate: 6.06%
• Cash-on-cash: -0.83%
• DSCR: 0.96
• 1% rule: 0.75%
• Cash to close: $781,200

Investor read

• This is a 4×2bd/1.0ba + 4×1bd/1.0ba units multifamily listed at $2.79M.
• At list price, monthly cash flow is $-537 ($-6k/yr) — negative. Per door: $-67/mo.
• To cash-flow at today's rent, offer at most $2.70M (3.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $2.10M (24.6% below list).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $2.10M (24.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-1.2%/yr); year-one equity from $19k of loan paydown is wiped out by about $34k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#69 in CA, #2,627 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Santa Clara Unified (urban): math 49% / reading 66% proficiency, ranked #75 of 517 in CA (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+7.3%/yr); 69 active listings in the ZIP; high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts 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 $700k; list at $2.79M implies a 299% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.1% vs local median 1.3% in Santa Clara — 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 $21,047/mo this rent would consume 182% of the median local household income ($138k/yr) (locally 2356% 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?
• 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 1959 — 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 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?
• 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.