725 W College Ave

Santa Rosa, CA 95401

$11,800,000D

95 bd · 72.5 ba · 42,357 sqft · Built 1985 · MultiFamily · Active · 40 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $95,416/mo
• Mortgage (P&I): −$61,880
• Tax + insurance: −$12,078
• HOA: −$0
• Vac / Maint / Mgmt: −$20,037
• Net cashflow: $1,420/mo
• Annual: $17,045/yr
• Cap rate: 6.44%
• Cash-on-cash: 0.52%
• DSCR: 1.02
• 1% rule: 0.81%
• Cash to close: $3,304,000

Investor read

• This is a 25×3bd/2.5ba + 10×2bd/1ba units multifamily listed at $11.80M.
• At list price, monthly cash flow is $1k ($17k/yr) — positive. Per door: $41/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 $9.54M (19.1% below list).
• It's been on market 40 days — a 3% lower offer ($11.45M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $9.54M (19.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $82k of loan paydown is wiped out by about $354k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#112 in CA, #3,940 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Santa Rosa High (urban): math 31% / reading 47% proficiency, ranked #703 of 1,400 in CA (top 50%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Helen M. Lehman Elementary (411 students, 59% FRL); Hilliard Comstock Middle (434 students, 60% FRL); Piner High (1,361 students, 51% FRL) — zoned schools average 57% FRL vs 22% district-wide (35 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents soft (-1.4%/yr); 79 active listings in the ZIP; solid renter incomes; 1,039 units permitted in Sonoma County in 2024 (185 in 5+ unit buildings).
• Sonoma County population projected at +8% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts 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 $6.10M; list at $11.80M implies a 93% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 2.5% in Santa Rosa — 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 $95,416/mo this rent would consume 1223% of the median local household income ($94k/yr) (locally 1525% 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 40 days. Have you received any prior offers? Is the seller open to a 19% 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.
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.