587 Somoa Ln

Lathrop, CA 95330

$399,000C-

4 bd · 2.0 ba · 1,324 sqft · Built 1974 · SingleFamily · Pending · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,324/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$246
• HOA: −$0
• Vac / Maint / Mgmt: −$698
• Net cashflow: $287/mo
• Annual: $3,450/yr
• Cap rate: 7.16%
• Cash-on-cash: 3.09%
• DSCR: 1.14
• 1% rule: 0.83%
• Cash to close: $111,720

Investor read

• This is a 4-bed/2.0-bath single-family listed at $399k.
• At list price, monthly cash flow is $287 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $332k (16.7% below list).
• It's been on market 19 days — a 2% lower offer ($393k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $332k (16.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#842 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+, housing A+; Watch: amenities D, schools F, commute F.
• Manteca Unified (suburban): math 15% / reading 48% proficiency, ranked #297 of 517 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.6%/yr); 135 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 3,779 units permitted in San Joaquin County in 2024 (0 in 5+ unit buildings).
• San Joaquin County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 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 7.2% vs local median 3.1% in Lathrop — 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.
• This rent runs 32% of the median local income ($125k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1974 — 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 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?
• 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.