5181 Connecticut Dr #4

Carmichael, CA 95841

$207,500D

2 bd · 1.0 ba · 924 sqft · Built 1969 · Condo · Pending · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,750/mo
• Mortgage (P&I): −$1,088
• Tax + insurance: −$145
• HOA: −$330
• Vac / Maint / Mgmt: −$368
• Net cashflow: $-180/mo
• Annual: $-2,164/yr
• Cap rate: 5.25%
• Cash-on-cash: -3.72%
• DSCR: 0.83
• 1% rule: 0.84%
• Cash to close: $58,100

Investor read

• This is a 2-bed/1.0-bath condo listed at $208k.
• At list price, monthly cash flow is $-180 ($-2k/yr) — negative.
• To cash-flow at today's rent, offer at most $176k (15.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $175k (15.7% below list).
• It's been on market 48 days — a 3% lower offer ($201k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $175k (15.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $6k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#471 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A-, housing B+, employment B; Watch: schools C-, crime F, commute F.
• San Juan Unified (suburban): math 40% / reading 62% proficiency, ranked #138 of 517 in CA (top 27%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents soft (-1.1%/yr); 83 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 8d on market — plan ~1-2 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 $172k; 21% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major flood risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.3% vs local median 2.6% in Carmichael — 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.
• This rent runs 34% of the median local income ($61k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 48 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• Built in 1969 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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?