83 Castro St

Salinas, CA 93906

$4,199,000C

32 bd · 16.0 ba · 12,457 sqft · Built 1983 · MultiFamily · Active · 33 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $41,312/mo
• Mortgage (P&I): −$22,020
• Tax + insurance: −$2,697
• HOA: −$0
• Vac / Maint / Mgmt: −$8,676
• Net cashflow: $7,920/mo
• Annual: $95,035/yr
• Cap rate: 8.56%
• Cash-on-cash: 8.08%
• DSCR: 1.36
• 1% rule: 0.98%
• Cash to close: $1,175,720

Investor read

• This is a 16 × 2-bed/1-bath units multifamily listed at $4.20M.
• At list price, monthly cash flow is $8k ($95k/yr) — positive. Per door: $495/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $4.13M (1.6% below list).
• It's been on market 33 days — a 3% lower offer ($4.07M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $4.07M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $29k of loan paydown is wiped out by about $126k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#465 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, health & safety A+, employment B+; Watch: crime D-, amenities F, cost of living F.
• Salinas Union High (urban): math 23% / reading 39% proficiency, ranked #998 of 1,400 in CA (top 71%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Mckinnon (401 students, 76% FRL); John Gutierrez Middle (594 students, 62% FRL); Everett Alvarez High (2,146 students, 91% FRL).
• Market conditions: Rents rising fast (+4.9%/yr); 43 active listings in the ZIP; solid renter incomes; 530 units permitted in Monterey County in 2024 (50 in 5+ unit buildings).
• Monterey County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 6 sale attempts since 3y 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 $90k; list at $4.20M implies a 4566% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 4.9% rent growth), your $1.18M cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 8.6% vs local median 2.6% in Salinas — 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 $41,312/mo this rent would consume 508% of the median local household income ($98k/yr) (locally 1736% 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 33 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• Crime grade is D 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?
• 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.