2511 Ferndale Ave

Sacramento, CA 95822

$259,000C-

3 bd · 1.5 ba · 1,040 sqft · Built 1960 · SingleFamily · Pending · 5 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,039/mo
• Mortgage (P&I): −$1,358
• Tax + insurance: −$173
• HOA: −$0
• Vac / Maint / Mgmt: −$428
• Net cashflow: $80/mo
• Annual: $956/yr
• Cap rate: 6.66%
• Cash-on-cash: 1.32%
• DSCR: 1.06
• 1% rule: 0.79%
• Cash to close: $72,520

Investor read

• This is a 3-bed/1.5-bath single-family listed at $259k.
• At list price, monthly cash flow is $80 ($956/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $204k (21.3% below list).
• Only 5 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $204k (21.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k 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: 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.
• Zoned schools: Leonardo Da Vinci (797 students, 35% FRL); Cesar Chavez Intermediate (373 students, 91% FRL); Luther Burbank High (1,603 students, 78% FRL) — zoned schools at 68% FRL track the district average.
• Market conditions: Rents rising fast (+4.3%/yr); 107 active listings in the ZIP; 24 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 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.
• 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 6.7% 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.

Questions for listing agent

• Built in 1960 — 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.
• 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.