1011 Laguna St

Santa Barbara, CA 93101

$2,500,000C-

8 bd · 8.0 ba · 3,722 sqft · Built 1957 · MultiFamily · Pending · 191 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $20,277/mo
• Mortgage (P&I): −$13,110
• Tax + insurance: −$1,887
• HOA: −$0
• Vac / Maint / Mgmt: −$4,258
• Net cashflow: $1,022/mo
• Annual: $12,263/yr
• Cap rate: 6.78%
• Cash-on-cash: 1.75%
• DSCR: 1.08
• 1% rule: 0.81%
• Cash to close: $700,000

Investor read

• This is a 8 × 1-bed/1.0-bath units multifamily listed at $2.50M.
• At list price, monthly cash flow is $1k ($12k/yr) — positive. Per door: $128/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 $2.03M (18.9% below list).
• It's been on market 191 days — a 12% lower offer ($2.20M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.03M (18.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $75k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#219 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, health & safety A+; Watch: schools C-, crime F, cost of living F.
• Santa Barbara Unified (urban): math 45% / reading 54% proficiency, ranked #409 of 1,400 in CA (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1957 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+4.0%/yr); 52 active listings in the ZIP; solid renter incomes; 719 units permitted in Santa Barbara County in 2024 (217 in 5+ unit buildings).
• Santa Barbara County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 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 6.8% vs local median 1.8% in Santa Barbara — 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 $20,277/mo this rent would consume 270% of the median local household income ($90k/yr) (locally 3070% 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 191 days. Have you received any prior offers? Is the seller open to a 19% 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 1957 — 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.
• 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.