4140 Broadway

Sacramento, CA 95817

$498,000C-

4 bd · 2.0 ba · 2,112 sqft · Built 1935 · MultiFamily · Active · 91 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,528/mo
• Mortgage (P&I): −$2,612
• Tax + insurance: −$590
• HOA: −$0
• Vac / Maint / Mgmt: −$951
• Net cashflow: $375/mo
• Annual: $4,503/yr
• Cap rate: 7.20%
• Cash-on-cash: 3.23%
• DSCR: 1.14
• 1% rule: 0.91%
• Cash to close: $139,440

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $498k.
• At list price, monthly cash flow is $375 ($5k/yr) — positive. Per door: $188/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 $453k (9.1% below list).
• It's been on market 91 days — a 9% lower offer ($453k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $453k (9.1% 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 $15k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#218 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A; Watch: schools D+, crime F, cost of living F.
• Sacramento City Unified (urban): math 32% / reading 43% proficiency, ranked #804 of 1,400 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1935 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.3%/yr); 68 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $250k; list at $498k implies a 99% gain — meaningful room to come down on a strong offer.
• 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 3.0% in Sacramento — 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 $4,528/mo this rent would consume 85% of the median local household income ($64k/yr) (locally 1529% 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 91 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 1935 — 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 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?