404 W Oak St

Stockton, CA 95203

$1,080,000B-

240 bd · 225.0 ba · 9,868 sqft · Built 1976 · MultiFamily · Pending · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $27,725/mo
• Mortgage (P&I): −$5,664
• Tax + insurance: −$1,103
• HOA: −$0
• Vac / Maint / Mgmt: −$5,822
• Net cashflow: $15,136/mo
• Annual: $181,628/yr
• Cap rate: 23.11%
• Cash-on-cash: 60.06%
• DSCR: 3.67
• 1% rule: 2.57%
• Cash to close: $302,400

Investor read

• This is a 15 × 16-bed/?-bath units multifamily listed at $1.08M.
• At list price, monthly cash flow is $15k ($182k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($28k rent vs $1.08M).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $32k of value loss. Plan a longer hold.
• Location reads 57/100 on livability (#734 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+, health & safety A, amenities A-; Watch: employment C-, schools D-, crime F.
• Stockton Unified (urban): math 23% / reading 46% proficiency, ranked #295 of 517 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 64 active listings in the ZIP; 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.
• 8 sale attempts since 3y ago; this cycle's ask is 108443% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $515k; list at $1.08M implies a 110% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $302k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 23.1% vs local median 3.6% in Stockton — 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 $27,725/mo this rent would consume 525% of the median local household income ($63k/yr) (locally 1034% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1976 — 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 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?
• 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?
• 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.