Residence 3 Plan

French Valley, CA 92596

$573,990D-

4 bd · 3.0 ba · 2,080 sqft · Built — · SingleFamily · Active · 504 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,560/mo
• Mortgage (P&I): −$3,211
• Tax + insurance: −$1,020
• HOA: −$0
• Vac / Maint / Mgmt: −$748
• Net cashflow: $-1,419/mo
• Annual: $-17,031/yr
• Cap rate: 3.51%
• Cash-on-cash: -9.93%
• DSCR: 0.56
• 1% rule: 0.58%
• Cash to close: $171,440

Investor read

• This is a 4-bed/3.0-bath single-family listed at $574k.
• At list price, monthly cash flow is $-1k ($-17k/yr) — negative.
• To cash-flow at today's rent, offer at most $407k (29.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $356k (38.0% below list).
• It's been on market 504 days — a 12% lower offer ($505k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $356k (38.0% below list) — sets the bar for 1% rule.
• In year one you build about $65k of equity ($4k loan paydown + $61k appreciation (10.0% local appreciation)).
• Location reads 59/100 on livability (#655 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+, housing A+; Watch: schools D-, crime D-, amenities F.
• Murrieta Valley Unified (suburban): math 51% / reading 64% proficiency, ranked #255 of 1,400 in CA (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents soft (-0.8%/yr); 355 active listings in the ZIP; 11 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 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.
• 2 sale attempts since 2y ago; this cycle's ask is 5% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• By year 2, paydown + projected appreciation supports a ~$105k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• This rent runs 32% 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 504 days. Have you received any prior offers? Is the seller open to a 38% 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?
• Crime grade is D 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?
• 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.