275 Burnett Ave #148

Morgan Hill, CA 95037

$365,000D+

2 bd · 2.0 ba · 1,250 sqft · Built 1975 · Manufactured · Active · 259 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,736/mo
• Mortgage (P&I): −$1,914
• Tax + insurance: −$608
• HOA: −$0
• Vac / Maint / Mgmt: −$785
• Net cashflow: $429/mo
• Annual: $5,150/yr
• Cap rate: 7.70%
• Cash-on-cash: 5.04%
• DSCR: 1.22
• 1% rule: 1.02%
• Cash to close: $102,200

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $365k.
• At list price, monthly cash flow is $429 ($5k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $365k).
• It's been on market 259 days — a 12% lower offer ($321k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $321k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#34 in CA, #1,188 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: schools C-, cost of living F.
• Morgan Hill Unified (suburban): math 90% / reading 90% proficiency, ranked #9 of 517 in CA (top 2%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: Rents rising fast (+5.8%/yr); 233 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 23y ago; this cycle's ask has dropped $25k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $110k; list at $365k implies a 232% 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 7.7% vs local median 1.7% in Morgan Hill — 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.

Questions for listing agent

• It's been on market 259 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1975 — 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.
• 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.