15995 Palo Alto Dr

Guerneville, CA 95446

$249,000B-

5 bd · 4.0 ba · 1,620 sqft · Built 1911 · MultiFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,518/mo
• Mortgage (P&I): −$1,306
• Tax + insurance: −$1,051
• HOA: −$0
• Vac / Maint / Mgmt: −$949
• Net cashflow: $1,213/mo
• Annual: $14,551/yr
• Cap rate: 12.14%
• Cash-on-cash: 20.87%
• DSCR: 1.93
• 1% rule: 1.81%
• Cash to close: $69,720

Investor read

• This is a 5-bed/4.0-bath multifamily listed at $249k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $249k).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#666 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A-, employment B; Watch: health & safety D, amenities F, commute F.
• Guerneville Elementary (town): math 40% / reading 50% proficiency, ranked #591 of 1,400 in CA (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: property tax is 4.6% of price; built in 1911 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 82 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 1,039 units permitted in Sonoma County in 2024 (185 in 5+ unit buildings).
• Sonoma County population projected at +8% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $70k cash investment doubles in ~6 years — after that, you're playing with house money.
• Cap rate 12.1% vs local median 2.1% in Guerneville — 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 $4,518/mo this rent would consume 63% of the median local household income ($86k/yr) (locally 242% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1911 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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.