5542 Old Highway 53

Clearlake, CA 95422

$129,000C

2 bd · 2.0 ba · 1,200 sqft · Built 1976 · SingleFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,332/mo
• Mortgage (P&I): −$676
• Tax + insurance: −$149
• HOA: −$0
• Vac / Maint / Mgmt: −$280
• Net cashflow: $227/mo
• Annual: $2,723/yr
• Cap rate: 8.40%
• Cash-on-cash: 7.54%
• DSCR: 1.34
• 1% rule: 1.03%
• Cash to close: $36,120

Investor read

• This is a 2-bed/2.0-bath single-family listed at $129k.
• At list price, monthly cash flow is $227 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($1k rent vs $129k).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $892 of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#549 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+, health & safety A+; Watch: schools F, crime F, amenities F.
• Konocti Unified (town): math 9% / reading 21% proficiency, ranked #494 of 517 in CA (top 96%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 77% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 292 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 107 units permitted in Lake County in 2024 (40 in 5+ unit buildings).
• Lake County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts since 3y 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 $59k; list at $129k implies a 119% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.4% vs local median 3.8% in Clearlake — 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

• Built in 1976 — 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 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 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.