5547 Tares Cir

Elk Grove, CA 95757

$399,000D

2 bd · 2.0 ba · 1,314 sqft · Built 2006 · Condo · Active · 73 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,694/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$475
• HOA: −$260
• Vac / Maint / Mgmt: −$566
• Net cashflow: $-699/mo
• Annual: $-8,386/yr
• Cap rate: 4.19%
• Cash-on-cash: -7.51%
• DSCR: 0.67
• 1% rule: 0.68%
• Cash to close: $111,720

Investor read

• This is a 2-bed/2.0-bath condo listed at $399k.
• At list price, monthly cash flow is $-699 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $276k (30.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $269k (32.5% below list).
• It's been on market 73 days — a 6% lower offer ($375k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $269k (32.5% below list) — sets the bar for 1% rule.
• In year one you build about $43k of equity ($3k loan paydown + $40k appreciation (10.0% local appreciation)).
• Location reads 71/100 on livability (#212 in CA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime B+; Watch: commute F, cost of living F.
• Elk Grove Unified (suburban): math 40% / reading 51% proficiency, ranked #165 of 517 in CA (top 32%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Franklin Elementary (math 45% / reading 60%, grade C-, #350 of 1,571 statewide, top 22%, 894 students, 38% FRL); Toby Johnson Middle (math 58% / reading 65%, grade B+, #52 of 498 statewide, top 11%, 1,234 students, 33% FRL); Franklin High (math 56% / reading 72%, grade B-, #180 of 1,170 statewide, top 15%, 2,587 students, 25% FRL).
• Zoned-school proficiency averages 59% at this address vs 46% district-wide (+14 pts) — the actual schools serving this property are materially stronger than the Elk Grove Unified average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: Rents rising fast (+4.5%/yr); 297 active listings in the ZIP; 10 comparable units currently listed for rent nearby; rentals at typical pace (median 20d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $184k; list at $399k implies a 117% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$69k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.2% vs local median 2.8% in Elk Grove — 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 73 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• 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?
• 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.
• Schools are B-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?