117 Magnolia Ave

Goleta, CA 93117

$1,995,000B

36 bd · 48.0 ba · — sqft · Built 1970 · MultiFamily · Pending · 9 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $37,738/mo
• Mortgage (P&I): −$10,462
• Tax + insurance: −$1,562
• HOA: −$0
• Vac / Maint / Mgmt: −$7,925
• Net cashflow: $17,789/mo
• Annual: $213,471/yr
• Cap rate: 16.99%
• Cash-on-cash: 38.22%
• DSCR: 2.70
• 1% rule: 1.89%
• Cash to close: $558,600

Investor read

• This is a 6 × 6-bed/8.0-bath units multifamily listed at $2.00M.
• At list price, monthly cash flow is $18k ($213k/yr) — positive. Per door: $3k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($38k rent vs $2.00M).
• Only 9 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $14k of loan paydown is wiped out by about $60k of value loss. Plan a longer hold.
• Location reads 81/100 on livability (#40 in CA, #1,510 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Goleta Union Elementary (suburban): math 59% / reading 65% proficiency, ranked #195 of 1,400 in CA (top 14%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+6.5%/yr); 70 active listings in the ZIP; solid renter incomes; 719 units permitted in Santa Barbara County in 2024 (217 in 5+ unit buildings).
• Santa Barbara County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 6.5% rent growth), your $559k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 8→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 17.0% vs local median 2.9% in Goleta — 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 $37,738/mo this rent would consume 503% of the median local household income ($90k/yr) (locally 4402% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• Built in 1970 — 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.
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.