3208 2nd Ave

Sacramento, CA 95817

$875,000D-

6 bd · 7.0 ba · 3,008 sqft · Built 1992 · MultiFamily · Active · 284 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,151/mo
• Mortgage (P&I): −$4,589
• Tax + insurance: −$1,276
• HOA: −$0
• Vac / Maint / Mgmt: −$1,502
• Net cashflow: $-215/mo
• Annual: $-2,580/yr
• Cap rate: 6.00%
• Cash-on-cash: -1.05%
• DSCR: 0.95
• 1% rule: 0.82%
• Cash to close: $245,000

Investor read

• This is a 3×2bd/2ba + 1×1bd/1ba units multifamily listed at $875k.
• At list price, monthly cash flow is $-215 ($-3k/yr) — negative. Per door: $-54/mo.
• To cash-flow at today's rent, offer at most $837k (4.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $715k (18.3% below list).
• It's been on market 284 days — a 12% lower offer ($770k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $715k (18.3% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#218 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A; Watch: crime F, cost of living F.
• Sacramento City Unified (urban): math 32% / reading 43% proficiency, ranked #804 of 1,400 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Leonardo Da Vinci (797 students, 35% FRL); California Middle (783 students, 64% FRL); Hiram W. Johnson High (1,733 students, 77% FRL) — zoned schools at 59% FRL track the district average.
• Market conditions: Rents rising (+1.3%/yr); 70 active listings in the ZIP; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.0% vs local median 3.0% in Sacramento — 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 $7,151/mo this rent would consume 134% of the median local household income ($64k/yr) (locally 1529% 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 284 days. Have you received any prior offers? Is the seller open to a 18% 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?
• 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?
• 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?