6221 39th St

Lemon Hill, CA 95824

$2,000,000B+

36 bd · 27.0 ba · 15,807 sqft · Built 1963 · MultiFamily · Active · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $30,462/mo
• Mortgage (P&I): −$10,488
• Tax + insurance: −$1,707
• HOA: −$0
• Vac / Maint / Mgmt: −$6,397
• Net cashflow: $11,870/mo
• Annual: $142,442/yr
• Cap rate: 13.42%
• Cash-on-cash: 25.44%
• DSCR: 2.13
• 1% rule: 1.52%
• Cash to close: $560,000

Investor read

• This is a 18 × 2.0-bed/1.5-bath units multifamily listed at $2.00M.
• At list price, monthly cash flow is $12k ($142k/yr) — positive. Per door: $659/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($30k rent vs $2.00M).
• It's been on market 66 days — a 6% lower offer ($1.88M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.88M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $14k of loan paydown is wiped out by about $60k of value loss. Plan a longer hold.
• Location reads 45/100 on livability (#1,302 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A; Watch: health & safety D, crime F, amenities F.
• Sacramento City Unified (urban): math 32% / reading 43% proficiency, ranked #804 of 1,400 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Leonardo Da Vinci (797 students, 35% FRL); Fern Bacon Middle (671 students, 92% FRL); C. K. Mcclatchy High (2,427 students, 56% FRL) — zoned schools at 61% FRL track the district average.
• Market conditions: Rents rising fast (+6.4%/yr); 67 active listings in the ZIP; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $660k; list at $2.00M implies a 203% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 6.4% rent growth), your $560k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.4% vs local median 3.8% in Lemon Hill — 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 $30,462/mo this rent would consume 647% of the median local household income ($56k/yr) (locally 1671% 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 66 days. Have you received any prior offers? Is the seller open to a 6% 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 1963 — 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 F-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?