5604 Taos Way

San Diego, CA 92154

$705,900D-

3 bd · 3.5 ba · 1,974 sqft · Built 2026 · Townhouse · Active · 76 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,098/mo
• Mortgage (P&I): −$3,702
• Tax + insurance: −$1,176
• HOA: −$0
• Vac / Maint / Mgmt: −$1,071
• Net cashflow: $-851/mo
• Annual: $-10,214/yr
• Cap rate: 4.85%
• Cash-on-cash: -5.17%
• DSCR: 0.77
• 1% rule: 0.72%
• Cash to close: $197,652

Investor read

• This is a 3-bed/3.5-bath townhouse listed at $706k. Condition is rated excellent.
• At list price, monthly cash flow is $-851 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $583k (17.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $510k (27.8% below list).
• It's been on market 76 days — a 6% lower offer ($664k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $510k (27.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#123 in CA, #4,206 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: health & safety C-, crime D+, cost of living F.
• San Diego Unified (urban): math 19% / reading 29% proficiency, ranked #393 of 517 in CA (top 76%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Cadman Elementary (176 students, 51% FRL); Marston Middle (594 students, 41% FRL); Clairemont High (835 students, 49% FRL) — zoned schools at 47% FRL track the district average.
• Market conditions: Rents soft (-0.5%/yr); 368 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 47d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 60% of comp listings sitting > 30 days — soft ceiling on asking rent; solid renter incomes; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 4.8% vs local median 2.1% in San Diego — 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 $5,098/mo this rent would consume 64% of the median local household income ($95k/yr) (locally 19% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 76 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• 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?
• Crime grade is D 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.