2118 California St

Berkeley, CA 94703

$1,490,000B-

8 bd · 5.0 ba · 4,528 sqft · Built 1940 · MultiFamily · Active · 52 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $16,016/mo
• Mortgage (P&I): −$7,814
• Tax + insurance: −$1,947
• HOA: −$0
• Vac / Maint / Mgmt: −$3,363
• Net cashflow: $2,891/mo
• Annual: $34,698/yr
• Cap rate: 8.62%
• Cash-on-cash: 8.32%
• DSCR: 1.37
• 1% rule: 1.07%
• Cash to close: $417,200

Investor read

• This is a 2×3bd/1ba + 2×1bd/1ba + 1×2bd/1ba units multifamily listed at $1.49M.
• At list price, monthly cash flow is $3k ($35k/yr) — positive. Per door: $578/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($16k rent vs $1.49M).
• It's been on market 52 days — a 3% lower offer ($1.45M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.45M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $45k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#74 in CA, #2,860 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; Watch: crime F, cost of living F.
• Berkeley Unified (urban): math 61% / reading 67% proficiency, ranked #175 of 1,400 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 53 active listings in the ZIP; solid renter incomes; 1,742 units permitted in Alameda County in 2024 (856 in 5+ unit buildings).
• Alameda County population projected at +34% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts since 2y 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.
• Current owner paid $244k; list at $1.49M implies a 509% gain — meaningful room to come down on a strong offer.
• Cap rate 8.6% vs local median 2.0% in Berkeley — 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 $16,016/mo this rent would consume 175% of the median local household income ($110k/yr) (locally 1402% 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 52 days. Have you received any prior offers? Is the seller open to a 3% 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?
• Built in 1940 — 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 A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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.