1536 S State St #99

Hemet, CA 92543

$145,000C

2 bd · 2.0 ba · 1,224 sqft · Built 2006 · Manufactured · Active · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,960/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$113
• HOA: −$0
• Vac / Maint / Mgmt: −$412
• Net cashflow: $676/mo
• Annual: $8,107/yr
• Cap rate: 11.88%
• Cash-on-cash: 19.97%
• DSCR: 1.89
• 1% rule: 1.35%
• Cash to close: $40,600

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $145k.
• At list price, monthly cash flow is $676 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $145k).
• It's been on market 68 days — a 6% lower offer ($136k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $136k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,056 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: crime D+, amenities F, commute F.
• Hemet Unified (suburban): math 19% / reading 41% proficiency, ranked #360 of 517 in CA (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Mcsweeny Elementary (746 students, 90% FRL); Diamond Valley Middle (math 10% / reading 10%, grade F, #474 of 498 statewide, top 99%, 1,078 students, 91% FRL); West Valley High (math 18% / reading 40%, grade F, #770 of 1,170 statewide, top 66%, 1,898 students, 88% FRL) — zoned schools average 90% FRL vs 66% district-wide (24 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+1.8%/yr); 273 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals at typical pace (median 17d 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.
• 2 sale attempts 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.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $41k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 6→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.9% vs local median 4.8% in Hemet — 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 $1,960/mo this rent would consume 48% of the median local household income ($49k/yr) (locally 2144% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 68 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• 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 F-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 D 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.