185 Saxony Rd

Encinitas, CA 92024

$20,100,000D

1440 bd · 1440.0 ba · 7,550 sqft · Built 1988 · MultiFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $153,469/mo
• Mortgage (P&I): −$105,407
• Tax + insurance: −$20,624
• HOA: −$0
• Vac / Maint / Mgmt: −$32,228
• Net cashflow: $-4,790/mo
• Annual: $-57,477/yr
• Cap rate: 6.01%
• Cash-on-cash: -1.02%
• DSCR: 0.95
• 1% rule: 0.76%
• Cash to close: $5,628,000

Investor read

• This is a 32 × 45-bed/45.0-bath units multifamily listed at $20.10M.
• At list price, monthly cash flow is $-5k ($-57k/yr) — negative. Per door: $-150/mo.
• To cash-flow at today's rent, offer at most $19.25M (4.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $15.35M (23.6% below list).
• It's been on market 48 days — a 3% lower offer ($19.50M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $15.35M (23.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $139k of loan paydown is wiped out by about $603k of value loss. Plan a longer hold.
• Location reads 79/100 on livability (#54 in CA, #2,026 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: health & safety C-, cost of living F.
• San Dieguito Union High (urban): math 72% / reading 79% proficiency, ranked #56 of 1,400 in CA (top 4%) — strong family-tenant draw, lease renewals of 3-5y typical; only 8% free/reduced lunch — higher-income household profile.
• Zoned schools: Capri Elementary (631 students, 25% FRL); Oak Crest Middle (802 students, 24% FRL); Canyon Crest Academy (2,336 students, 11% FRL).
• Market conditions: Rents rising fast (+5.4%/yr); 208 active listings in the ZIP; high-income renter base; 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.
• 10 sale attempts since 3y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $3.45M; list at $20.10M implies a 483% gain — meaningful room to come down on a strong offer.
• Cap rate 6.0% vs local median 1.6% in Encinitas — 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 $153,469/mo this rent would consume 1162% of the median local household income ($159k/yr) (locally 1537% 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 48 days. Have you received any prior offers? Is the seller open to a 24% 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?
• 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?
• 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.