855 Folsom St #742

San Francisco, CA 94107

$381,000B-

2 bd · 1.0 ba · 838 sqft · Built 2001 · Condo · Active · 242 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,873/mo
• Mortgage (P&I): −$1,998
• Tax + insurance: −$747
• HOA: −$923
• Vac / Maint / Mgmt: −$1,023
• Net cashflow: $182/mo
• Annual: $2,186/yr
• Cap rate: 6.87%
• Cash-on-cash: 2.05%
• DSCR: 1.09
• 1% rule: 1.28%
• Cash to close: $106,680

Investor read

• This is a 2-bed/1.0-bath condo listed at $381k. Condition is rated good.
• At list price, monthly cash flow is $182 ($2k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $381k).
• It's been on market 242 days — a 12% lower offer ($335k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $335k (12.0% below list) — sets the bar for market timing.
• In year one you build about $21k of equity ($3k loan paydown + $18k appreciation (4.8% local appreciation)).
• Location reads 76/100 on livability (#90 in CA, #3,143 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• San Francisco Unified (urban): math 50% / reading 56% proficiency, ranked #322 of 1,400 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Lilienthal (Claire) Elementary (669 students, 19% FRL); Giannini (A.P.) Middle (1,192 students, 34% FRL); Lowell High (2,632 students, 37% FRL) — zoned schools average 30% FRL vs 49% district-wide (19 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising fast (+18.9%/yr); 266 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 42d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 750 units permitted in San Francisco County in 2024 (688 in 5+ unit buildings).
• San Francisco County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 21y ago; this cycle's ask has dropped $100k (21%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (4.8% appreciation + 8.0% rent growth), your $107k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$34k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 6.9% vs local median 2.2% in San Francisco — 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.
• This rent runs 32% of the median local income ($183k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 242 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.