Plan 8 Grayson Plan

Elk Grove, CA 95757

$779,999F

4 bd · 3.0 ba · 3,129 sqft · Built — · SingleFamily · Active · 138 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,599/mo
• Mortgage (P&I): −$4,791
• Tax + insurance: −$1,523
• HOA: −$0
• Vac / Maint / Mgmt: −$756
• Net cashflow: $-3,470/mo
• Annual: $-41,642/yr
• Cap rate: 1.73%
• Cash-on-cash: -16.28%
• DSCR: 0.28
• 1% rule: 0.39%
• Cash to close: $255,799

Investor read

• This is a 4-bed/3.0-bath single-family listed at $780k.
• At list price, monthly cash flow is $-3k ($-42k/yr) — negative.
• To cash-flow at today's rent, offer at most $411k (47.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $360k (53.9% below list).
• It's been on market 138 days — a 12% lower offer ($686k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $360k (53.9% below list) — sets the bar for 1% rule.
• In year one you build about $98k of equity ($6k loan paydown + $91k 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.
• Market conditions: Rents rising fast (+4.5%/yr); 297 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• By year 2, paydown + projected appreciation supports a ~$157k 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 1.7% vs local median 2.8% in Elk Grove — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 31% of the median local income ($138k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 138 days. Have you received any prior offers? Is the seller open to a 54% concession, seller financing, or rate buy-down credit?
• 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?
• 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.