162 N 3rd

Banning, CA 92220

$429,900D

6 bd · 4.0 ba · 1,252 sqft · Built 1915 · MultiFamily · Active · 46 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,178/mo
• Mortgage (P&I): −$2,254
• Tax + insurance: −$537
• HOA: −$0
• Vac / Maint / Mgmt: −$877
• Net cashflow: $510/mo
• Annual: $6,114/yr
• Cap rate: 7.72%
• Cash-on-cash: 5.08%
• DSCR: 1.23
• 1% rule: 0.97%
• Cash to close: $120,372

Investor read

• This is a 2 × 3-bed/2.0-bath units multifamily listed at $430k.
• At list price, monthly cash flow is $510 ($6k/yr) — positive. Per door: $255/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 $418k (2.8% below list).
• It's been on market 46 days — a 3% lower offer ($417k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $417k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 48/100 on livability (#1,192 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing B+; Watch: crime C-, amenities F, commute F.
• Banning Unified (suburban): math 15% / reading 25% proficiency, ranked #1,258 of 1,400 in CA (top 90%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Central Elementary (783 students, 89% FRL); Nicolet Middle (975 students, 90% FRL); Banning High (1,146 students, 87% FRL).
• Watch-outs: built in 1915 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.6%/yr); 318 active listings in the ZIP; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 14 sale attempts since 20y 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 $290k; 48% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 3.0% in Banning — 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 $4,178/mo this rent would consume 80% of the median local household income ($63k/yr) (locally 1146% 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 46 days. Have you received any prior offers? Is the seller open to a 3% 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 1915 — 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 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?
• 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.