1400 Meredith Ave #40

Gustine, CA 95322

$38,000B-

2 bd · 1.0 ba · 720 sqft · Built 1973 · Manufactured · Pending · 83 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $693/mo
• Mortgage (P&I): −$199
• Tax + insurance: −$63
• HOA: −$0
• Vac / Maint / Mgmt: −$146
• Net cashflow: $285/mo
• Annual: $3,418/yr
• Cap rate: 15.29%
• Cash-on-cash: 32.13%
• DSCR: 2.43
• 1% rule: 1.82%
• Cash to close: $10,640

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $38k. Condition is rated good.
• At list price, monthly cash flow is $285 ($3k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($693 rent vs $38k).
• It's been on market 83 days — a 6% lower offer ($36k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $36k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $263 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#321 in CA) — a middle-class / working-renter tenant base. Strengths: health & safety A+, housing A, crime B+; Watch: employment D, amenities F, commute F.
• Gustine Unified (rural): math 17% / reading 32% proficiency, ranked #1,180 of 1,400 in CA (top 84%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Gustine Elementary (544 students, 81% FRL); Gustine Middle (405 students, 78% FRL); Gustine High (586 students, 74% FRL).
• Market conditions: 30 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 459 units permitted in Merced County in 2024 (0 in 5+ unit buildings).
• Merced County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $11k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 83 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1973 — 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.

Repairs flagged (vision-AI assessment)

• Minor: Kitchen cabinets — Dated and could be replaced
• Minor: Bathroom fixtures — Standard and could be upgraded