3016 Club Rancho

Palmdale, CA 93551

$679,900C

5 bd · 4.0 ba · 3,341 sqft · Built 2005 · SingleFamily · Active · 2 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,745/mo
• Mortgage (P&I): −$3,565
• Tax + insurance: −$944
• HOA: −$0
• Vac / Maint / Mgmt: −$1,416
• Net cashflow: $819/mo
• Annual: $9,832/yr
• Cap rate: 7.74%
• Cash-on-cash: 5.16%
• DSCR: 1.23
• 1% rule: 0.99%
• Cash to close: $190,372

Investor read

• This is a 5-bed/4.0-bath single-family listed at $680k.
• At list price, monthly cash flow is $819 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $675k (0.8% below list).
• Only 2 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $675k (0.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $20k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#861 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: schools F, crime F, amenities F.
• Westside Union Elementary (suburban): math 34% / reading 49% proficiency, ranked #565 of 1,400 in CA (top 40%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.3%/yr); 386 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 19,697 units permitted in Los Angeles County in 2024 (9,426 in 5+ unit buildings).
• Los Angeles County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 7y ago; this cycle's ask is 40% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $457k; 49% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 5→13/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 4.5% in Palmdale — 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 $6,745/mo this rent would consume 68% of the median local household income ($120k/yr) (locally 1168% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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.
• 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.