Plan 1470 Plan

Menifee, CA 92596

$538,990D-

3 bd · 2.0 ba · 1,470 sqft · Built — · SingleFamily · Active · 107 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,689/mo
• Mortgage (P&I): −$3,043
• Tax + insurance: −$967
• HOA: −$0
• Vac / Maint / Mgmt: −$775
• Net cashflow: $-1,096/mo
• Annual: $-13,147/yr
• Cap rate: 4.03%
• Cash-on-cash: -8.09%
• DSCR: 0.64
• 1% rule: 0.64%
• Cash to close: $162,478

Investor read

• This is a 3-bed/2.0-bath single-family listed at $539k.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative.
• To cash-flow at today's rent, offer at most $422k (21.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $369k (31.6% below list).
• It's been on market 107 days — a 9% lower offer ($490k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $369k (31.6% below list) — sets the bar for 1% rule.
• In year one you build about $62k of equity ($4k loan paydown + $58k appreciation (10.0% local appreciation)).
• Location reads 64/100 on livability (#407 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+, crime A, employment A-; Watch: health & safety D+, amenities D, commute F.
• 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.
• Zoned schools: Southshore Elementary (874 students, 52% FRL); Bell Mountain Middle (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 1,097 students, 57% FRL) — zoned schools average 54% FRL vs 32% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 24% at this address vs 50% district-wide (-25 pts) — the specific schools serving this property underperform the Menifee Union Elementary average; the district grade overstates school quality for this exact location.
• Market conditions: Rents soft (-0.8%/yr); 353 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 5d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 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.
• By year 2, paydown + projected appreciation supports a ~$100k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• This rent runs 33% of the median local income ($133k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 107 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• 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 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?
• 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.