940 East St

Lafayette, CA 94549

$1,369,000C+

4 bd · 3.0 ba · 2,974 sqft · Built 1949 · MultiFamily · Pending · 59 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $14,066/mo
• Mortgage (P&I): −$7,179
• Tax + insurance: −$1,287
• HOA: −$0
• Vac / Maint / Mgmt: −$2,954
• Net cashflow: $2,645/mo
• Annual: $31,746/yr
• Cap rate: 8.61%
• Cash-on-cash: 8.28%
• DSCR: 1.37
• 1% rule: 1.03%
• Cash to close: $383,320

Investor read

• This is a 3 × 5-bed/3.0-bath units multifamily listed at $1.37M.
• At list price, monthly cash flow is $3k ($32k/yr) — positive. Per door: $882/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($14k rent vs $1.37M).
• It's been on market 59 days — a 3% lower offer ($1.33M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.33M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $9k of loan paydown is wiped out by about $41k of value loss. Plan a longer hold.
• Location reads 84/100 on livability (#15 in CA, #672 nationally) — a professional / high-income tenant draw. Strengths: schools A+, crime A+, commute A+; Watch: cost of living F.
• Acalanes Union High (suburban): math 73% / reading 85% proficiency, ranked #21 of 517 in CA (top 4%) — strong family-tenant draw, lease renewals of 3-5y typical.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.0%/yr); 159 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals leasing fast (median 3d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 2,169 units permitted in Contra Costa County in 2024 (896 in 5+ unit buildings).
• Contra Costa County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts 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.
• Current owner paid $258k; list at $1.37M implies a 432% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 5.0% rent growth), your $383k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.6% vs local median 0.9% in Lafayette — 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 $14,066/mo this rent would consume 72% of the median local household income ($235k/yr) (locally 413% 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 59 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1949 — 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 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?
• 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.