221 E E St

Tehachapi, CA 93561

$675,000C-

2 bd · 2.0 ba · 3,822 sqft · Built 1988 · MultiFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,479/mo
• Mortgage (P&I): −$3,540
• Tax + insurance: −$518
• HOA: −$0
• Vac / Maint / Mgmt: −$1,361
• Net cashflow: $1,061/mo
• Annual: $12,730/yr
• Cap rate: 8.18%
• Cash-on-cash: 6.74%
• DSCR: 1.30
• 1% rule: 0.96%
• Cash to close: $189,000

Investor read

• This is a 4 × 2-bed/1.5-bath units multifamily listed at $675k.
• At list price, monthly cash flow is $1k ($13k/yr) — positive. Per door: $265/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 $648k (4.0% below list).
• It's been on market 48 days — a 3% lower offer ($655k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $648k (4.0% 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 51/100 on livability (#1,093 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A; Watch: employment D+, crime F, amenities F.
• Tehachapi Unified (town): math 26% / reading 40% proficiency, ranked #285 of 517 in CA (top 55%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Cummings Valley Elementary (math 36% / reading 45%, grade F, #599 of 1,571 statewide, top 39%, 586 students, 24% FRL).
• Market conditions: Rents flat; 654 active listings in the ZIP; solid renter incomes; 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.
• 2 sale attempts; this cycle's ask is 4% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $449k; list at $675k implies a 50% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: major wildfire risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.2% vs local median 3.4% in Tehachapi — 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 $6,479/mo this rent would consume 89% of the median local household income ($87k/yr) (locally 568% 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 48 days. Have you received any prior offers? Is the seller open to a 4% concession, seller financing, or rate buy-down credit?
• 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?
• 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.