5859 Mandarin Dr

Goleta, CA 93117

$2,485,000C-

72 bd · 36.0 ba · — sqft · Built 1956 · MultiFamily · Active · 282 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $21,174/mo
• Mortgage (P&I): −$13,032
• Tax + insurance: −$1,543
• HOA: −$0
• Vac / Maint / Mgmt: −$4,447
• Net cashflow: $2,153/mo
• Annual: $25,840/yr
• Cap rate: 7.33%
• Cash-on-cash: 3.71%
• DSCR: 1.17
• 1% rule: 0.85%
• Cash to close: $695,800

Investor read

• This is a 6 × 2-bed/1.0-bath units multifamily listed at $2.48M.
• At list price, monthly cash flow is $2k ($26k/yr) — positive. Per door: $359/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $2.12M (14.8% below list).
• It's been on market 282 days — a 12% lower offer ($2.19M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.12M (14.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $75k 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.
• Zoned schools: La Patera Elementary (376 students, 47% FRL); Goleta Valley Junior High (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 717 students, 49% FRL); Dos Pueblos Senior High (2,034 students, 44% FRL) — zoned schools average 47% FRL vs 30% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 24% at this address vs 62% district-wide (-38 pts) — the specific schools serving this property underperform the Goleta Union Elementary average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+6.5%/yr); 75 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.
• 2 sale attempts; this cycle's ask has dropped $510k (17%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• 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 7.3% 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 $21,174/mo this rent would consume 282% 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

• It's been on market 282 days. Have you received any prior offers? Is the seller open to a 15% 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?
• Built in 1956 — 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.
• 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.