725 W Thornton #157

Hemet, CA 92543

$75,500B-

2 bd · 2.0 ba · 1,440 sqft · Built 1972 · Manufactured · Active · 99 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,996/mo
• Mortgage (P&I): −$396
• Tax + insurance: −$48
• HOA: −$0
• Vac / Maint / Mgmt: −$419
• Net cashflow: $1,132/mo
• Annual: $13,586/yr
• Cap rate: 24.29%
• Cash-on-cash: 64.27%
• DSCR: 3.86
• 1% rule: 2.64%
• Cash to close: $21,140

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $76k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $76k).
• It's been on market 99 days — a 9% lower offer ($69k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $69k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $522 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,056 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: crime D+, schools F, amenities F.
• Hemet Unified (suburban): math 19% / reading 41% proficiency, ranked #360 of 517 in CA (top 70%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 66% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+1.8%/yr); 264 active listings in the ZIP; 34 comparable units currently listed for rent nearby; rentals at typical pace (median 24d on market — plan ~3-4 weeks tenant-placement turnaround); 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 has dropped $4k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $58k; 30% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $21k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 24.3% vs local median 4.9% in Hemet — 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 $1,996/mo this rent would consume 48% of the median local household income ($49k/yr) (locally 2144% 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 99 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1972 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 F-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?
• 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.