31848 Railroad canyon Rd

Canyon Lake, CA 92587

$304,950D

2 bd · 2.0 ba · 1,312 sqft · Built 1976 · Condo · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,227/mo
• Mortgage (P&I): −$1,599
• Tax + insurance: −$214
• HOA: −$752
• Vac / Maint / Mgmt: −$678
• Net cashflow: $-16/mo
• Annual: $-190/yr
• Cap rate: 6.23%
• Cash-on-cash: -0.22%
• DSCR: 0.99
• 1% rule: 1.06%
• Cash to close: $85,386

Investor read

• This is a 2-bed/2.0-bath condo listed at $305k.
• At list price, monthly cash flow is $-16 ($-190/yr) — negative.
• To cash-flow at today's rent, offer at most $302k (0.9% below list).
• Meets the 1% rule at list price ($3k rent vs $305k).
• It's been on market 19 days — a 2% lower offer ($300k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $300k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 56/100 on livability (#825 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+, housing A+; Watch: health & safety C-, amenities F, commute F.
• Lake Elsinore Unified (suburban): math 34% / reading 49% proficiency, ranked #210 of 517 in CA (top 41%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Cottonwood Canyon Elementary (math 54% / reading 54%, grade C, #311 of 1,571 statewide, top 21%, 789 students, 50% FRL); Canyon Lake Middle (math 44% / reading 64%, grade B-, #78 of 498 statewide, top 15%, 955 students, 51% FRL); Temescal Canyon High (math 50% / reading 90%, grade B+, #112 of 1,170 statewide, top 10%, 2,176 students, 59% FRL).
• Zoned-school proficiency averages 60% at this address vs 42% district-wide (+18 pts) — the actual schools serving this property are materially stronger than the Lake Elsinore Unified average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: HOA is 23% of rent.
• Market conditions: 251 active listings in the ZIP; 12 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 21y 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 $52k; list at $305k implies a 486% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.2% vs local median 2.3% in Canyon Lake — 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

• 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?
• Built in 1976 — 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.
• 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?
• 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.