477 Calle Cadiz Unit Q

Laguna Woods, CA 92637

$228,000C-

1 bd · 1.0 ba · 770 sqft · Built 1968 · Condo · Active · 12 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,810/mo
• Mortgage (P&I): −$1,196
• Tax + insurance: −$380
• HOA: −$827
• Vac / Maint / Mgmt: −$590
• Net cashflow: $-183/mo
• Annual: $-2,191/yr
• Cap rate: 5.33%
• Cash-on-cash: -3.43%
• DSCR: 0.85
• 1% rule: 1.23%
• Cash to close: $63,840

Investor read

• This is a 1-bed/1.0-bath condo listed at $228k.
• At list price, monthly cash flow is $-183 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $202k (11.6% below list).
• Meets the 1% rule at list price ($3k rent vs $228k).
• Only 12 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $202k (11.6% below list) — sets the bar for cash-flow.
• In year one you build about $15k of equity ($2k loan paydown + $13k appreciation (5.9% local appreciation)).
• Location reads 72/100 on livability (#200 in CA) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+; Watch: schools C-, amenities D+, cost of living F.
• Saddleback Valley Unified (suburban): math 51% / reading 73% proficiency, ranked #67 of 517 in CA (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: HOA is 29% of rent.
• Market conditions: Rents rising fast (+6.8%/yr); 191 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 15y 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 $150k; list at $228k implies a 52% gain — meaningful room to come down on a strong offer.
• By year 3, paydown + projected appreciation supports a ~$37k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 5.3% vs local median 2.4% in Laguna Woods — 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 $2,810/mo this rent would consume 57% of the median local household income ($59k/yr) (locally 1572% 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?
• Built in 1968 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.