552 Walnut St

San Carlos, CA 94070

$2,950,000A-

9 bd · 8.0 ba · 7,877 sqft · Built 1978 · MultiFamily · Active · 155 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $40,216/mo
• Mortgage (P&I): −$15,470
• Tax + insurance: −$2,984
• HOA: −$0
• Vac / Maint / Mgmt: −$8,445
• Net cashflow: $13,317/mo
• Annual: $159,804/yr
• Cap rate: 11.71%
• Cash-on-cash: 19.35%
• DSCR: 1.86
• 1% rule: 1.36%
• Cash to close: $826,000

Investor read

• This is a 6×9bd/8.5ba + 1×3bd/2.5ba units multifamily listed at $2.95M.
• At list price, monthly cash flow is $13k ($160k/yr) — positive. Per door: $2k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($40k rent vs $2.95M).
• It's been on market 155 days — a 12% lower offer ($2.60M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.60M (12.0% below list) — sets the bar for market timing.
• In year one you build about $217k of equity ($20k loan paydown + $196k appreciation (6.7% local appreciation)).
• Location reads 82/100 on livability (#30 in CA, #1,083 nationally) — a professional / high-income tenant draw. Strengths: schools A+, commute A+, employment A+; Watch: amenities D, cost of living F.
• San Carlos Elementary (suburban): math 70% / reading 77% proficiency, ranked #30 of 517 in CA (top 6%) — strong family-tenant draw, lease renewals of 3-5y typical; only 5% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising fast (+5.9%/yr); 54 active listings in the ZIP; high-income renter base; 1,019 units permitted in San Mateo County in 2024 (484 in 5+ unit buildings).
• San Mateo County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $577k (16%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $515k; list at $2.95M implies a 473% gain — meaningful room to come down on a strong offer.
• At projected returns (6.7% appreciation + 5.9% rent growth), your $826k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$346k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 11.7% vs local median 0.7% in San Carlos — 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 $40,216/mo this rent would consume 201% of the median local household income ($240k/yr) (locally 626% 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 155 days. Have you received any prior offers? Is the seller open to a 12% 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 1978 — 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 A-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.