200 Burnett Ave #105

Morgan Hill, CA 95037

$315,000C-

2 bd · 2.0 ba · 880 sqft · Built 1972 · Manufactured · Active · 11 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,097/mo
• Mortgage (P&I): −$1,652
• Tax + insurance: −$525
• HOA: −$0
• Vac / Maint / Mgmt: −$650
• Net cashflow: $269/mo
• Annual: $3,233/yr
• Cap rate: 7.32%
• Cash-on-cash: 3.67%
• DSCR: 1.16
• 1% rule: 0.98%
• Cash to close: $88,200

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $315k.
• At list price, monthly cash flow is $269 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $310k (1.7% below list).
• Only 11 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $310k (1.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 82/100 on livability (#34 in CA, #1,188 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: schools C-, cost of living F.
• Morgan Hill Unified (suburban): math 90% / reading 90% proficiency, ranked #9 of 517 in CA (top 2%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Market conditions: Rents rising fast (+5.8%/yr); 231 active listings in the ZIP; 2 comparable units currently listed for rent nearby; high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 22y 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.
• Current owner paid $243k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.3% vs local median 1.7% in Morgan Hill — 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

• Built in 1972 — 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.