7742 Walpole Ave

California City, CA 93505

$310,000C

4 bd · 2.0 ba · 1,520 sqft · Built 1969 · MultiFamily · Active · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,859/mo
• Mortgage (P&I): −$1,626
• Tax + insurance: −$478
• HOA: −$0
• Vac / Maint / Mgmt: −$600
• Net cashflow: $154/mo
• Annual: $1,853/yr
• Cap rate: 6.89%
• Cash-on-cash: 2.14%
• DSCR: 1.10
• 1% rule: 0.92%
• Cash to close: $86,800

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $310k.
• At list price, monthly cash flow is $154 ($2k/yr) — positive. Per door: $77/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $286k (7.8% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $286k (7.8% below list) — sets the bar for 1% rule.
• In year one you build about $33k of equity ($2k loan paydown + $31k appreciation (10.0% local appreciation)).
• Location reads 44/100 on livability (#1,329 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: schools F, crime F, amenities F.
• Mojave Unified (town): math 25% / reading 25% proficiency, ranked #411 of 517 in CA (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+5.5%/yr); 703 active listings in the ZIP; 25 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 3,244 units permitted in Kern County in 2024 (73 in 5+ unit buildings).
• Kern County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 18 sale attempts since 19y ago 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.
• At projected returns (10.0% appreciation + 5.5% rent growth), your $87k cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$53k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 6→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.9% vs local median 5.2% in California City — 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 $2,859/mo this rent would consume 57% of the median local household income ($60k/yr) (locally 883% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1969 — 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 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 F 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.