138 Liberty

Newport Beach, CA 92660

$420,000B-

2 bd · 2.0 ba · 960 sqft · Built 1982 · Manufactured · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,566/mo
• Mortgage (P&I): −$2,203
• Tax + insurance: −$700
• HOA: −$0
• Vac / Maint / Mgmt: −$959
• Net cashflow: $705/mo
• Annual: $8,458/yr
• Cap rate: 8.31%
• Cash-on-cash: 7.19%
• DSCR: 1.32
• 1% rule: 1.09%
• Cash to close: $117,600

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $420k.
• At list price, monthly cash flow is $705 ($8k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $420k).
• It's been on market 30 days — a 2% lower offer ($414k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $414k (1.5% below list) — sets the bar for market timing.
• In year one you build about $45k of equity ($3k loan paydown + $42k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#101 in CA, #3,645 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, employment A+, commute A; Watch: health & safety C-, cost of living F.
• Newport-Mesa Unified (urban): math 46% / reading 58% proficiency, ranked #106 of 517 in CA (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Corona Del Mar High (math 55% / reading 63%, grade C+, #221 of 1,170 statewide, top 19%, 2,059 students, 20% FRL) — zoned schools average 20% FRL vs 40% district-wide (20 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising fast (+4.1%/yr); 154 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $55k (12%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (10.0% appreciation + 4.1% rent growth), your $118k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$72k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.3% vs local median 0.6% in Newport Beach — 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.
• This rent runs 34% of the median local income ($160k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-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?
• 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.