3501 Lafayette St

Santa Clara, CA 95054

$7,225,000C

None bd · None ba · 14,280 sqft · Built 1965 · MultiFamily · Active · 100 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $70,296/mo
• Mortgage (P&I): −$37,889
• Tax + insurance: −$8,595
• HOA: −$0
• Vac / Maint / Mgmt: −$14,762
• Net cashflow: $9,050/mo
• Annual: $108,598/yr
• Cap rate: 7.80%
• Cash-on-cash: 5.37%
• DSCR: 1.24
• 1% rule: 0.97%
• Cash to close: $2,023,000

Investor read

• This is a 17 × 2-bed/2-bath units multifamily listed at $7.22M.
• At list price, monthly cash flow is $9k ($109k/yr) — positive. Per door: $532/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 $7.03M (2.7% below list).
• It's been on market 100 days — a 9% lower offer ($6.57M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $6.57M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $50k of loan paydown is wiped out by about $217k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#69 in CA, #2,627 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Santa Clara Unified (urban): math 49% / reading 66% proficiency, ranked #75 of 517 in CA (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+6.0%/yr); 24 active listings in the ZIP; high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 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 $5.94M; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• 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 7.8% vs local median 1.3% in Santa Clara — 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 $70,296/mo this rent would consume 406% of the median local household income ($208k/yr) (locally 889% 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 100 days. Have you received any prior offers? Is the seller open to a 9% 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 1965 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.