805 W Bay

Newport Beach, CA 92661

$3,000,000D

4 bd · 3.0 ba · 1,943 sqft · Built 1939 · SingleFamily · Active · 47 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $12,933/mo
• Mortgage (P&I): −$15,732
• Tax + insurance: −$5,000
• HOA: −$0
• Vac / Maint / Mgmt: −$2,716
• Net cashflow: $-10,515/mo
• Annual: $-126,179/yr
• Cap rate: 2.09%
• Cash-on-cash: -15.02%
• DSCR: 0.33
• 1% rule: 0.43%
• Cash to close: $840,000

Investor read

• This is a 4-bed/3.0-bath single-family listed at $3.00M.
• At list price, monthly cash flow is $-11k ($-126k/yr) — negative.
• To cash-flow at today's rent, offer at most $1.48M (50.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.29M (56.9% below list).
• It's been on market 47 days — a 3% lower offer ($2.91M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.29M (56.9% below list) — sets the bar for 1% rule.
• In year one you build about $321k of equity ($21k loan paydown + $300k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#101 in CA, #3,645 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, employment A+, commute A; Watch: health & safety C-, cost of living F.
• Newport-Mesa Unified (urban): math 46% / reading 58% proficiency, ranked #106 of 517 in CA (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Newport Elementary (math 67%, 313 students, 26% FRL); Horace Ensign Intermediate (math 49%, 915 students, 48% FRL); Newport Harbor High (math 44% / reading 66%, grade C, #249 of 1,170 statewide, top 22%, 2,268 students, 44% FRL) — zoned schools at 39% FRL track the district average.
• Watch-outs: built in 1939 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+13.6%/yr); 52 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 65% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 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.
• 3 sale attempts 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 $52k; list at $3.00M implies a 5669% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$516k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.1% vs local median 0.6% in Newport Beach — 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

• 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?
• It's been on market 47 days. Have you received any prior offers? Is the seller open to a 57% concession, seller financing, or rate buy-down credit?
• Built in 1939 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.
• 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.