8797 Valley Oak Ln

Elk Grove, CA 95624

$489,900D

3 bd · 3.0 ba · 1,834 sqft · Built 1984 · SingleFamily · Active · 32 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,329/mo
• Mortgage (P&I): −$2,569
• Tax + insurance: −$413
• HOA: −$0
• Vac / Maint / Mgmt: −$699
• Net cashflow: $-352/mo
• Annual: $-4,219/yr
• Cap rate: 5.43%
• Cash-on-cash: -3.08%
• DSCR: 0.86
• 1% rule: 0.68%
• Cash to close: $137,172

Investor read

• This is a 3-bed/3.0-bath single-family listed at $490k.
• At list price, monthly cash flow is $-352 ($-4k/yr) — negative.
• To cash-flow at today's rent, offer at most $428k (12.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $333k (32.0% below list).
• It's been on market 32 days — a 3% lower offer ($475k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $333k (32.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $15k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#212 in CA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime B+; Watch: commute F, cost of living F.
• Elk Grove Unified (suburban): math 40% / reading 51% proficiency, ranked #165 of 517 in CA (top 32%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Florence Markofer Elementary (math 35% / reading 36%, grade F, #709 of 1,571 statewide, top 45%, 625 students, 40% FRL); Joseph Kerr Middle (math 38% / reading 51%, grade D, #130 of 498 statewide, top 27%, 791 students, 40% FRL); Elk Grove High (math 43% / reading 58%, grade D+, #324 of 1,170 statewide, top 28%, 1,774 students, 31% FRL).
• Market conditions: Rents flat; 243 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $371k; 32% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% vs local median 2.8% in Elk Grove — 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 32% of the median local income ($125k/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 32 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• 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?
• 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.