2020 Ashby #37

Franklin, CA 95348

$45,000B-

2 bd · 1.0 ba · 784 sqft · Built 1990 · Manufactured · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,725/mo
• Mortgage (P&I): −$236
• Tax + insurance: −$154
• HOA: −$0
• Vac / Maint / Mgmt: −$362
• Net cashflow: $973/mo
• Annual: $11,671/yr
• Cap rate: 35.49%
• Cash-on-cash: 104.28%
• DSCR: 5.64
• 1% rule: 3.83%
• Cash to close: $12,600

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $45k.
• At list price, monthly cash flow is $973 ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $45k).
• It's been on market 26 days — a 2% lower offer ($44k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $44k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $311 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,087 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: employment D, schools F, crime F.
• Merced Union High (urban): math 20% / reading 46% proficiency, ranked #301 of 517 in CA (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $122/mo.
• Market conditions: Rents soft (-0.8%/yr); 173 active listings in the ZIP; 459 units permitted in Merced County in 2024 (0 in 5+ unit buildings).
• Merced County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 11y ago; this cycle's ask is 329% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $9k; list at $45k implies a 400% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $13k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance); 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.
• This rent runs 32% of the median local income ($65k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?
• 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.