1721 N Fairfax Dr

San Bernardino, CA 92404

$2,990,000C-

32 bd · 16.0 ba · 14,136 sqft · Built 1963 · MultiFamily · Active · 465 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $29,608/mo
• Mortgage (P&I): −$15,680
• Tax + insurance: −$3,640
• HOA: −$0
• Vac / Maint / Mgmt: −$6,218
• Net cashflow: $4,071/mo
• Annual: $48,848/yr
• Cap rate: 7.93%
• Cash-on-cash: 5.83%
• DSCR: 1.26
• 1% rule: 0.99%
• Cash to close: $837,200

Investor read

• This is a 16 × 2-bed/1.0-bath units multifamily listed at $2.99M.
• At list price, monthly cash flow is $4k ($49k/yr) — positive. Per door: $254/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 $2.96M (1.0% below list).
• It's been on market 465 days — a 12% lower offer ($2.63M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.63M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $21k of loan paydown is wiped out by about $90k of value loss. Plan a longer hold.
• Location reads 59/100 on livability (#661 in CA) — a working-class tenant base; expect higher turnover. Strengths: commute A+, housing A; Watch: schools D, employment D, crime F.
• San Bernardino City Unified (urban): math 27% / reading 40% proficiency, ranked #959 of 1,400 in CA (top 68%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 81% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents flat; 102 active listings in the ZIP; 5,458 units permitted in San Bernardino County in 2024 (1,500 in 5+ unit buildings).
• San Bernardino County population projected at +15% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 19 sale attempts since 22y 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 $2.02M; 48% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.9% vs local median 3.5% in San Bernardino — 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 $29,608/mo this rent would consume 533% of the median local household income ($67k/yr) (locally 3423% 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 465 days. Have you received any prior offers? Is the seller open to a 12% 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 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?