338 Potrero Ave #308

San Francisco, CA 94103

$414,731C+

2 bd · 2.0 ba · 823 sqft · Built 2016 · Condo · Pending · 102 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,815/mo
• Mortgage (P&I): −$2,175
• Tax + insurance: −$567
• HOA: −$777
• Vac / Maint / Mgmt: −$1,011
• Net cashflow: $285/mo
• Annual: $3,415/yr
• Cap rate: 7.12%
• Cash-on-cash: 2.94%
• DSCR: 1.13
• 1% rule: 1.16%
• Cash to close: $116,125

Investor read

• This is a 2-bed/2.0-bath condo listed at $415k.
• At list price, monthly cash flow is $285 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($5k rent vs $415k).
• It's been on market 102 days — a 9% lower offer ($377k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $377k (9.0% below list) — sets the bar for market timing.
• In year one you build about $23k of equity ($3k loan paydown + $21k appreciation (5.0% local appreciation)).
• Location reads 76/100 on livability (#90 in CA, #3,143 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• San Francisco Unified (urban): math 50% / reading 56% proficiency, ranked #322 of 1,400 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+15.5%/yr); 108 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 17d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 750 units permitted in San Francisco County in 2024 (688 in 5+ unit buildings).
• San Francisco County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• At projected returns (5.0% appreciation + 8.0% rent growth), your $116k cash investment doubles in ~4 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$38k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 7.1% vs local median 2.1% in San Francisco — 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 $4,815/mo this rent would consume 50% of the median local household income ($116k/yr) (locally 2666% 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 102 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 B-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?
• 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.