1342 Johnson Ave

Klamath Falls, OR 97601

$165,000C-

3 bd · 1.0 ba · 1,376 sqft · Built 1920 · SingleFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,495/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$212
• HOA: −$0
• Vac / Maint / Mgmt: −$314
• Net cashflow: $103/mo
• Annual: $1,242/yr
• Cap rate: 7.05%
• Cash-on-cash: 2.69%
• DSCR: 1.12
• 1% rule: 0.91%
• Cash to close: $46,200

Investor read

• This is a 3-bed/1.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $103 ($1k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $149k (9.4% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $149k (9.4% 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 $5k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#67 in OR, #2,703 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: crime F, employment F.
• Klamath Falls City Schools (town): math 26% / reading 40% proficiency, ranked #36 of 58 in OR (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 62% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Roosevelt Elementary School (math 54% / reading 34%, grade F, #143 of 412 statewide, top 38%, 316 students, 88% FRL); Ponderosa Middle School (math 27% / reading 41%, grade F, #71 of 128 statewide, top 56%, 565 students, 88% FRL); Klamath Union High School (math 15% / reading 64%, grade F, #69 of 143 statewide, top 54%, 645 students, 89% FRL) — zoned schools average 89% FRL vs 62% district-wide (27 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1920 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.1%/yr); 493 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); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 232 units permitted in Klamath County in 2024 (72 in 5+ unit buildings).
• Klamath County population projected at -12% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• Current owner paid $40k; list at $165k implies a 318% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.0% vs local median 3.4% in Klamath Falls — 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 35% of the median local income ($52k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Built in 1920 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?
• 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.