436 N Mercey Springs Rd #69

Los Banos, CA 93635

$85,000B+

2 bd · 2.0 ba · 1,056 sqft · Built 1973 · Manufactured · Active · 136 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,073/mo
• Mortgage (P&I): −$446
• Tax + insurance: −$142
• HOA: −$0
• Vac / Maint / Mgmt: −$435
• Net cashflow: $1,051/mo
• Annual: $12,607/yr
• Cap rate: 21.12%
• Cash-on-cash: 52.97%
• DSCR: 3.36
• 1% rule: 2.44%
• Cash to close: $23,800

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $85k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $85k).
• It's been on market 136 days — a 12% lower offer ($75k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $75k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $588 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#270 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+, amenities B; Watch: schools D, commute F, cost of living F.
• Los Banos Unified (town): math 3% / reading 16% proficiency, ranked #503 of 517 in CA (top 97%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+6.5%/yr); 211 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; 459 units permitted in Merced County in 2024 (0 in 5+ unit buildings).
• Merced County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 2y ago; this cycle's ask has dropped $15k (15%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 6.5% rent growth), your $24k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: moderate flood risk; moderate wildfire 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 21.1% vs local median 3.4% in Los Banos — 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 37% of the median local income ($67k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 136 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 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?
• 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.