1151 Davis St

Redwood City, CA 94061

$3,100,000C

8 bd · 7.0 ba · 5,510 sqft · Built 1961 · MultiFamily · Active · 128 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $33,140/mo
• Mortgage (P&I): −$16,257
• Tax + insurance: −$3,619
• HOA: −$0
• Vac / Maint / Mgmt: −$6,959
• Net cashflow: $6,304/mo
• Annual: $75,653/yr
• Cap rate: 8.73%
• Cash-on-cash: 8.72%
• DSCR: 1.39
• 1% rule: 1.07%
• Cash to close: $868,000

Investor read

• This is a 7 × 7-bed/7.0-bath units multifamily listed at $3.10M.
• At list price, monthly cash flow is $6k ($76k/yr) — positive. Per door: $901/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($33k rent vs $3.10M).
• It's been on market 128 days — a 12% lower offer ($2.73M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.73M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $21k of loan paydown is wiped out by about $93k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• Sequoia Union High (suburban): math 52% / reading 69% proficiency, ranked #159 of 1,400 in CA (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+6.7%/yr); 62 active listings in the ZIP; high-income renter base; 1,019 units permitted in San Mateo County in 2024 (484 in 5+ unit buildings).
• San Mateo County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 22y 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.
• Current owner paid $2.27M; 36% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 6.7% rent growth), your $868k cash investment doubles in ~9 years — after that, you're playing with house money.
• Cap rate 8.7% vs local median 1.3% in Redwood City — 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 $33,140/mo this rent would consume 272% of the median local household income ($146k/yr) (locally 1550% 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 128 days. Have you received any prior offers? Is the seller open to a 12% 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?
• Built in 1961 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.