3977 Leonore Ave

Clearlake, CA 95422

$50,000B-

2 bd · 1.0 ba · 576 sqft · Built 1973 · Land · Active · 24 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $944/mo
• Mortgage (P&I): −$262
• Tax + insurance: −$155
• HOA: −$0
• Vac / Maint / Mgmt: −$198
• Net cashflow: $329/mo
• Annual: $3,943/yr
• Cap rate: 14.18%
• Cash-on-cash: 28.16%
• DSCR: 2.25
• 1% rule: 1.89%
• Cash to close: $14,000

Investor read

• This is a 2-bed/1.0-bath land listed at $50k.
• At list price, monthly cash flow is $329 ($4k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($944 rent vs $50k).
• It's been on market 24 days — a 2% lower offer ($49k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $49k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $346 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#549 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+; Watch: schools F, crime F, amenities F.
• Konocti Unified (town): math 9% / reading 21% proficiency, ranked #494 of 517 in CA (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: property tax is 3.2% of price.
• Market conditions: 292 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 107 units permitted in Lake County in 2024 (40 in 5+ unit buildings).
• Lake County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 7 sale attempts since 23y 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 $35k; 43% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $14k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.2% vs local median 3.8% in Clearlake — 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.

Questions for listing agent

• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• 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 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.
• 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.