31850 Railroad Canyon Rd

Canyon Lake, CA 92587

$279,999D

2 bd · 2.0 ba · 1,312 sqft · Built 1976 · Condo · Active · 160 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,227/mo
• Mortgage (P&I): −$1,468
• Tax + insurance: −$387
• HOA: −$752
• Vac / Maint / Mgmt: −$678
• Net cashflow: $-58/mo
• Annual: $-698/yr
• Cap rate: 6.04%
• Cash-on-cash: -0.89%
• DSCR: 0.96
• 1% rule: 1.15%
• Cash to close: $78,400

Investor read

• This is a 2-bed/2.0-bath condo listed at $280k.
• At list price, monthly cash flow is $-58 ($-698/yr) — negative.
• To cash-flow at today's rent, offer at most $270k (3.7% below list).
• Meets the 1% rule at list price ($3k rent vs $280k).
• It's been on market 160 days — a 12% lower offer ($246k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $246k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 56/100 on livability (#825 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+, housing A+; Watch: health & safety C-, schools D, amenities F.
• Lake Elsinore Unified (suburban): math 34% / reading 49% proficiency, ranked #210 of 517 in CA (top 41%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: HOA is 23% of rent.
• Market conditions: 248 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 16 sale attempts since 24y ago; this cycle's ask has dropped $39k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 2.3% in Canyon Lake — 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 160 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1976 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?