1538-1544 Polk St

San Francisco, CA 94109

$4,500,000A-

None bd · None ba · 14,160 sqft · Built 1907 · MultiFamily · Active · 56 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $105,014/mo
• Mortgage (P&I): −$23,598
• Tax + insurance: −$7,500
• HOA: −$0
• Vac / Maint / Mgmt: −$22,053
• Net cashflow: $51,863/mo
• Annual: $622,351/yr
• Cap rate: 20.12%
• Cash-on-cash: 49.39%
• DSCR: 3.20
• 1% rule: 2.33%
• Cash to close: $1,260,000

Investor read

• This is a 40 × 1-bed/?-bath units multifamily listed at $4.50M. Condition is rated fair.
• At list price, monthly cash flow is $52k ($622k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($105k rent vs $4.50M).
• It's been on market 56 days — a 3% lower offer ($4.37M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $4.37M (3.0% below list) — sets the bar for market timing.
• In year one you build about $257k of equity ($31k loan paydown + $226k appreciation (5.0% local appreciation)).
• Location reads 76/100 on livability (#90 in CA, #3,143 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• San Francisco Unified (urban): math 50% / reading 56% proficiency, ranked #322 of 1,400 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1907 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+15.6%/yr); 155 active listings in the ZIP; solid renter incomes; 750 units permitted in San Francisco County in 2024 (688 in 5+ unit buildings).
• San Francisco County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 4y 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.
• At projected returns (5.0% appreciation + 8.0% rent growth), your $1.26M cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$412k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 20.1% vs local median 2.1% in San Francisco — 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 $105,014/mo this rent would consume 1189% of the median local household income ($106k/yr) (locally 5272% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 56 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1907 — 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 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?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?

Repairs flagged (vision-AI assessment)

• Minor: Kitchen cabinets — Worn and dated appearance.
• Minor: Bathroom fixtures — Basic and dated appearance.
• Minor: Exterior paint — Some discoloration and wear visible.
• Minor: Interior paint — Signs of wear and could benefit from a fresh coat.
• Minor: HVAC maintenance — Functional but may need maintenance.