5402-8 Churchward St

San Diego, CA 92114

$875,000D+

16 bd · 16.0 ba · — sqft · Built 1952 · MultiFamily · Pending · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,467/mo
• Mortgage (P&I): −$4,589
• Tax + insurance: −$1,458
• HOA: −$0
• Vac / Maint / Mgmt: −$1,778
• Net cashflow: $642/mo
• Annual: $7,704/yr
• Cap rate: 7.17%
• Cash-on-cash: 3.14%
• DSCR: 1.14
• 1% rule: 0.97%
• Cash to close: $245,000

Investor read

• This is a 4 × 1-bed/1.0-bath units multifamily listed at $875k.
• At list price, monthly cash flow is $642 ($8k/yr) — positive. Per door: $161/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 $847k (3.2% below list).
• It's been on market 40 days — a 3% lower offer ($849k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $847k (3.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $26k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#123 in CA, #4,206 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: health & safety C-, crime D+, cost of living F.
• San Diego Unified (urban): math 19% / reading 29% proficiency, ranked #393 of 517 in CA (top 76%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Watch-outs: built in 1952 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+8.6%/yr); 104 active listings in the ZIP; solid renter incomes; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (-3.0% appreciation + 8.0% rent growth), your $245k cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 7.2% vs local median 2.0% in San Diego — 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 $8,467/mo this rent would consume 104% of the median local household income ($98k/yr) (locally 1586% 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 40 days. Have you received any prior offers? Is the seller open to a 3% 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 1952 — 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.
• 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 D 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?