6820 7th Ave

Rio Linda, CA 95673

$2,000,000C

28 bd · 1.4 ba · 9,120 sqft · Built 1959 · MultiFamily · Pending · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $22,750/mo
• Mortgage (P&I): −$10,488
• Tax + insurance: −$2,637
• HOA: −$0
• Vac / Maint / Mgmt: −$4,778
• Net cashflow: $4,848/mo
• Annual: $58,173/yr
• Cap rate: 9.20%
• Cash-on-cash: 10.39%
• DSCR: 1.46
• 1% rule: 1.14%
• Cash to close: $560,000

Investor read

• This is a 14 × 2-bed/1-bath units multifamily listed at $2.00M.
• At list price, monthly cash flow is $5k ($58k/yr) — positive. Per door: $346/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($23k rent vs $2.00M).
• It's been on market 25 days — a 2% lower offer ($1.97M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.97M (1.5% below list) — sets the bar for market timing.
• 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 55/100 on livability (#856 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+, employment A-; Watch: schools C-, crime F, amenities F.
• Twin Rivers Unified (suburban): math 29% / reading 37% proficiency, ranked #970 of 1,400 in CA (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 52 active listings in the ZIP; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 3y ago; this cycle's ask is 135493% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $1.73M; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.2% vs local median 3.4% in Rio Linda — 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

• 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 1959 — 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.
• 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 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.