Residence 5 Plan

Rancho Cordova, CA 95742

$615,000F

4 bd · 2.5 ba · 2,547 sqft · Built — · SingleFamily · Active · 199 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,257/mo
• Mortgage (P&I): −$3,847
• Tax + insurance: −$1,223
• HOA: −$0
• Vac / Maint / Mgmt: −$684
• Net cashflow: $-2,497/mo
• Annual: $-29,960/yr
• Cap rate: 2.21%
• Cash-on-cash: -14.59%
• DSCR: 0.35
• 1% rule: 0.44%
• Cash to close: $205,407

Investor read

• This is a 4-bed/2.5-bath single-family listed at $615k.
• At list price, monthly cash flow is $-2k ($-30k/yr) — negative.
• To cash-flow at today's rent, offer at most $372k (39.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $326k (47.0% below list).
• It's been on market 199 days — a 12% lower offer ($541k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $326k (47.0% below list) — sets the bar for 1% rule.
• In year one you build about $78k of equity ($5k loan paydown + $73k appreciation (10.0% local appreciation)).
• Location reads 68/100 on livability (#268 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+, employment B; Watch: commute C-, crime D, 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: Sunrise Elementary (math 65% / reading 67%, grade B+, #176 of 1,571 statewide, top 11%, 966 students, 21% FRL); Katherine L. Albiani Middle (math 55% / reading 67%, grade B+, #57 of 498 statewide, top 12%, 1,307 students, 27% FRL); Pleasant Grove High (math 57% / reading 74%, grade B, #157 of 1,170 statewide, top 14%, 2,520 students, 22% FRL) — zoned schools average 23% FRL vs 43% district-wide (19 pts lower); this property's tenant base skews higher-income than the district average.
• Zoned-school proficiency averages 64% at this address vs 46% district-wide (+19 pts) — the actual schools serving this property are materially stronger than the Elk Grove Unified average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: Rents rising (+2.1%/yr); 471 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals at typical pace (median 19d 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.
• By year 2, paydown + projected appreciation supports a ~$126k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 2.2% vs local median 3.0% in Rancho Cordova — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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 199 days. Have you received any prior offers? Is the seller open to a 47% concession, seller financing, or rate buy-down credit?
• 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.
• 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?
• 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.