1825 Magnolia

Chico, CA 95926

$565,000C+

25 bd · 25.0 ba · 3,717 sqft · Built 1960 · MultiFamily · Active · 55 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,324/mo
• Mortgage (P&I): −$2,963
• Tax + insurance: −$942
• HOA: −$0
• Vac / Maint / Mgmt: −$1,328
• Net cashflow: $1,091/mo
• Annual: $13,096/yr
• Cap rate: 8.61%
• Cash-on-cash: 8.28%
• DSCR: 1.37
• 1% rule: 1.12%
• Cash to close: $158,200

Investor read

• This is a 5 × 1-bed/1-bath units multifamily listed at $565k. Condition is rated fair.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $218/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $565k).
• It's been on market 55 days — a 3% lower offer ($548k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $548k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#195 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A-; Watch: employment C-, crime F, cost of living F.
• Chico Unified (urban): math 40% / reading 70% proficiency, ranked #117 of 517 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+4.0%/yr); 90 active listings in the ZIP; 946 units permitted in Butte County in 2024 (254 in 5+ unit buildings).
• Butte County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 5 sale attempts since 2y 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.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 5→13/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% vs local median 2.6% in Chico — 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 $6,324/mo this rent would consume 123% of the median local household income ($62k/yr) (locally 3912% 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 55 days. Have you received any prior offers? Is the seller open to a 3% 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1960 — 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 B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?

Repairs flagged (vision-AI assessment)

• Minor: kitchen cabinets — Some items are on top of cabinets
• Minor: bathroom cabinets — Some items are on top of cabinets
• Major: landscaping — Overgrown yard and unkempt appearance