307 Southbay Dr #307

San Jose, CA 95134

$299,000B+

3 bd · 2.0 ba · 1,360 sqft · Built 1993 · Manufactured · Active · 61 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,514/mo
• Mortgage (P&I): −$1,568
• Tax + insurance: −$925
• HOA: −$0
• Vac / Maint / Mgmt: −$948
• Net cashflow: $1,073/mo
• Annual: $12,880/yr
• Cap rate: 12.31%
• Cash-on-cash: 21.50%
• DSCR: 1.96
• 1% rule: 1.51%
• Cash to close: $83,720

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $299k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $299k).
• It's been on market 61 days — a 6% lower offer ($281k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $281k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-2.1%/yr); year-one equity from $2k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#68 in CA, #2,559 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, 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: flood insurance adds $427/mo.
• Market conditions: Rents rising fast (+5.9%/yr); 19 active listings in the ZIP; 30 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 6 sale attempts since 14y ago; this cycle's ask has dropped $26k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-2.1% appreciation + 5.9% rent growth), your $84k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); extreme-heat days projected 8→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.3% vs local median 1.6% in San Jose — 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.

Questions for listing agent

• It's been on market 61 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• 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?
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.