18335 Montezuma

Adelanto, CA 92301

$7,200,000B

2928 bd · 2304.0 ba · 13,944 sqft · Built 1986 · MultiFamily · Active · 35 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $90,894/mo
• Mortgage (P&I): −$37,758
• Tax + insurance: −$12,000
• HOA: −$0
• Vac / Maint / Mgmt: −$19,088
• Net cashflow: $22,049/mo
• Annual: $264,584/yr
• Cap rate: 9.97%
• Cash-on-cash: 13.12%
• DSCR: 1.58
• 1% rule: 1.26%
• Cash to close: $2,016,000

Investor read

• This is a 48 × 61-bed/48.0-bath units multifamily listed at $7.20M.
• At list price, monthly cash flow is $22k ($265k/yr) — positive. Per door: $459/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($91k rent vs $7.20M).
• It's been on market 35 days — a 3% lower offer ($6.98M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $6.98M (3.0% below list) — sets the bar for market timing.
• In year one you build about $770k of equity ($50k loan paydown + $720k appreciation (10.0% local appreciation)).
• Location reads 47/100 on livability (#1,250 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: crime D, schools F, amenities F.
• Victor Valley Union High (urban): math 25% / reading 25% proficiency, ranked #407 of 517 in CA (top 79%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+4.7%/yr); 615 active listings in the ZIP; 5,458 units permitted in San Bernardino County in 2024 (1,500 in 5+ unit buildings).
• San Bernardino County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 14 sale attempts since 3y ago; this cycle's ask is 578213% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $800k; list at $7.20M implies a 801% gain — meaningful room to come down on a strong offer.
• At projected returns (10.0% appreciation + 4.7% rent growth), your $2.02M cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$1.24M cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 5→13/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.0% vs local median 4.2% in Adelanto — 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 $90,894/mo this rent would consume 1588% of the median local household income ($69k/yr) (locally 1345% 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 35 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?
• 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.