40-44 San Carlos St

San Francisco, CA 94110

$1,229,000B+

15 bd · 3.0 ba · 2,825 sqft · Built 1908 · MultiFamily · Active · 57 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $15,254/mo
• Mortgage (P&I): −$6,445
• Tax + insurance: −$956
• HOA: −$0
• Vac / Maint / Mgmt: −$3,203
• Net cashflow: $4,650/mo
• Annual: $55,801/yr
• Cap rate: 10.90%
• Cash-on-cash: 16.45%
• DSCR: 1.73
• 1% rule: 1.24%
• Cash to close: $344,120

Investor read

• This is a 3 × 2-bed/1.0-bath units multifamily listed at $1.23M.
• At list price, monthly cash flow is $5k ($56k/yr) — positive. Per door: $2k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($15k rent vs $1.23M).
• It's been on market 57 days — a 3% lower offer ($1.19M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.19M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $37k of value loss. Plan a longer hold.
• 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: flood insurance adds $66/mo; built in 1908 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+14.5%/yr); 161 active listings in the ZIP; high-income renter base; 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.
• 2 sale attempts; this cycle's ask has dropped $120k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $344k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.9% 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 $15,254/mo this rent would consume 116% of the median local household income ($158k/yr) (locally 2732% 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 57 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?
• Built in 1908 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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?