27701 Murrieta #5

Menifee, CA 92586

$145,000B-

2 bd · 2.0 ba · 1,440 sqft · Built 1974 · Manufactured · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,366/mo
• Mortgage (P&I): −$760
• Tax + insurance: −$242
• HOA: −$0
• Vac / Maint / Mgmt: −$497
• Net cashflow: $867/mo
• Annual: $10,407/yr
• Cap rate: 13.47%
• Cash-on-cash: 25.63%
• DSCR: 2.14
• 1% rule: 1.63%
• Cash to close: $40,600

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $145k.
• At list price, monthly cash flow is $867 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $145k).
• It's been on market 15 days — a 2% lower offer ($143k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $143k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $4k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#407 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+, crime A, employment A-; Watch: schools D+, health & safety D+, amenities D.
• Menifee Union Elementary (suburban): math 43% / reading 56% proficiency, ranked #434 of 1,400 in CA (top 31%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising fast (+6.1%/yr); 197 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 9 sale attempts since 15y 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 $38k; list at $145k implies a 282% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 6.1% rent growth), your $41k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 13.5% vs local median 3.6% in Menifee — 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 $2,366/mo this rent would consume 49% of the median local household income ($58k/yr) (locally 1163% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1974 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.