340 Old Mill Rd #221

Eastern Goleta Valley, CA 93110

$560,000D

2 bd · 2.0 ba · 1,667 sqft · Built 1978 · Manufactured · Active · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,490/mo
• Mortgage (P&I): −$2,937
• Tax + insurance: −$1,000
• HOA: −$0
• Vac / Maint / Mgmt: −$943
• Net cashflow: $-389/mo
• Annual: $-4,672/yr
• Cap rate: 5.60%
• Cash-on-cash: -2.47%
• DSCR: 0.89
• 1% rule: 0.80%
• Cash to close: $156,800

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $560k.
• At list price, monthly cash flow is $-389 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $504k (10.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $449k (19.8% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $449k (19.8% below list) — sets the bar for 1% rule.
• In year one you build about $26k of equity ($4k loan paydown + $22k appreciation (4.0% local appreciation)).
• Location reads: area grade D — affects rentability + tenant quality, not the cash-flow math above.
• Zoned schools: Hope Elementary (269 students, 43% FRL); La Colina Junior High (900 students, 42% FRL).
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: 49 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 719 units permitted in Santa Barbara County in 2024 (217 in 5+ unit buildings).
• Santa Barbara County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 8 sale attempts since 33y 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 $435k; 29% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$42k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: severe flood risk; major wildfire risk; extreme-heat days projected 11→30/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.6% vs local median 1.2% in Eastern Goleta Valley — 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 42% of the median local income ($129k/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?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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.
• 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.