3737 Terrace Dr

South Lake Tahoe, CA 96150

$275,000B

5 bd · 4.0 ba · 3,168 sqft · Built 1967 · SingleFamily · Active · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,278/mo
• Mortgage (P&I): −$1,442
• Tax + insurance: −$458
• HOA: −$0
• Vac / Maint / Mgmt: −$898
• Net cashflow: $1,479/mo
• Annual: $17,754/yr
• Cap rate: 12.75%
• Cash-on-cash: 23.06%
• DSCR: 2.03
• 1% rule: 1.56%
• Cash to close: $77,000

Investor read

• This is a 5-bed/4.0-bath single-family listed at $275k.
• At list price, monthly cash flow is $1k ($18k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $275k).
• It's been on market 29 days — a 2% lower offer ($271k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $271k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 65/100 on livability (#371 in CA) — a middle-class / working-renter tenant base. Strengths: health & safety A+; Watch: schools D-, crime F, commute F.
• Lake Tahoe Unified (town): math 33% / reading 43% proficiency, ranked #786 of 1,400 in CA (top 56%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+3.6%/yr); 307 active listings in the ZIP; 2 comparable units currently listed for rent nearby; solid renter incomes; 437 units permitted in El Dorado County in 2024 (0 in 5+ unit buildings).
• El Dorado County population projected to shrink 3% by 2050 — rents likely to lag national; underwrite the cash flow, not the appreciation.
• 8 sale attempts since 21y 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.
• At projected returns (-3.0% appreciation + 3.6% rent growth), your $77k cash investment doubles in ~6 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.7% vs local median 2.5% in South Lake Tahoe — 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 $4,278/mo this rent would consume 55% of the median local household income ($93k/yr) (locally 1109% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1967 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.