Plan 2 Plan

Irvine, CA 92618

$1,202,888F

4 bd · 3.5 ba · 2,048 sqft · Built — · Townhouse · Active · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,638/mo
• Mortgage (P&I): −$6,765
• Tax + insurance: −$2,150
• HOA: −$322
• Vac / Maint / Mgmt: −$1,184
• Net cashflow: $-4,783/mo
• Annual: $-57,398/yr
• Cap rate: 1.84%
• Cash-on-cash: -15.89%
• DSCR: 0.29
• 1% rule: 0.44%
• Cash to close: $361,199

Investor read

• This is a 4-bed/3.5-bath townhouse listed at $1.20M. Condition is rated excellent.
• At list price, monthly cash flow is $-5k ($-57k/yr) — negative.
• To cash-flow at today's rent, offer at most $598k (50.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $564k (53.1% below list).
• It's been on market 22 days — a 2% lower offer ($1.18M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $564k (53.1% below list) — sets the bar for 1% rule.
• In year one you build about $17k of equity ($9k loan paydown + $8k appreciation (0.6% local appreciation)).
• Location reads 76/100 on livability (#100 in CA, #3,537 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+, employment A+; Watch: health & safety C-, cost of living F.
• Saddleback Valley Unified (suburban): math 51% / reading 73% proficiency, ranked #67 of 517 in CA (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Rancho Canada Elementary (632 students, 34% FRL); Serrano Intermediate (977 students, 48% FRL); El Toro High (math 53% / reading 77%, grade B, #161 of 1,170 statewide, top 14%, 2,031 students, 48% FRL) — zoned schools average 44% FRL vs 22% district-wide (22 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.1%/yr); 622 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 80d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 85% 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.
• By year 5, paydown + projected appreciation supports a ~$84k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 1.8% vs local median 1.3% in Irvine — 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 $5,638/mo this rent would consume 46% of the median local household income ($146k/yr) — very limited rent-growth headroom before tenants either downsize or default.

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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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.
• 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.