1609 Kathy

Dos Palos, CA 93620

$259,900D+

4 bd · 2.0 ba · 1,504 sqft · Built 1984 · SingleFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,256/mo
• Mortgage (P&I): −$1,363
• Tax + insurance: −$342
• HOA: −$0
• Vac / Maint / Mgmt: −$474
• Net cashflow: $77/mo
• Annual: $920/yr
• Cap rate: 6.65%
• Cash-on-cash: 1.26%
• DSCR: 1.06
• 1% rule: 0.87%
• Cash to close: $72,772

Investor read

• This is a 4-bed/2.0-bath single-family listed at $260k.
• At list price, monthly cash flow is $77 ($920/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 $226k (13.2% below list).
• It's been on market 20 days — a 2% lower offer ($256k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $226k (13.2% 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 $8k of value loss. Plan a longer hold.
• Location reads 54/100 on livability (#909 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+, health & safety A; Watch: employment C-, crime F, amenities F.
• Dos Palos Oro Loma Joint Unified (town): math 11% / reading 25% proficiency, ranked #479 of 517 in CA (top 93%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 79% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Dos Palos Elementary (539 students, 89% FRL); Bryant Middle (math 12% / reading 21%, grade F, #448 of 498 statewide, top 91%, 514 students, 89% FRL); Dos Palos High (math 12% / reading 52%, grade F, #674 of 1,170 statewide, top 59%, 665 students, 87% FRL).
• Market conditions: 38 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 459 units permitted in Merced County in 2024 (0 in 5+ unit buildings).
• Merced County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $30k; list at $260k implies a 766% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• 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 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.