5450 Monterey Rd #168

San Jose, CA 95111

$369,000C

2 bd · 2.0 ba · 1,440 sqft · Built 1973 · Manufactured · Active · 117 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,843/mo
• Mortgage (P&I): −$1,935
• Tax + insurance: −$615
• HOA: −$0
• Vac / Maint / Mgmt: −$807
• Net cashflow: $486/mo
• Annual: $5,833/yr
• Cap rate: 7.87%
• Cash-on-cash: 5.65%
• DSCR: 1.25
• 1% rule: 1.04%
• Cash to close: $103,320

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $369k.
• At list price, monthly cash flow is $486 ($6k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $369k).
• It's been on market 117 days — a 9% lower offer ($336k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $336k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#68 in CA, #2,559 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• Oak Grove Elementary (urban): math 47% / reading 54% proficiency, ranked #339 of 1,400 in CA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+1.0%/yr); 65 active listings in the ZIP; 19 comparable units currently listed for rent nearby; rentals leasing fast (median 2d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 6 sale attempts since 17y ago; this cycle's ask has dropped $21k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $292k; 26% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.9% vs local median 1.6% in San Jose — 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 $3,843/mo this rent would consume 45% of the median local household income ($101k/yr) (locally 1808% 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 117 days. Have you received any prior offers? Is the seller open to a 9% 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.
• 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.
• 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.