811 W 2nd

Chico, CA 95926

$1,225,000B

25 bd · 13.0 ba · 8,880 sqft · Built 1984 · MultiFamily · Active · 173 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $14,276/mo
• Mortgage (P&I): −$6,424
• Tax + insurance: −$1,656
• HOA: −$0
• Vac / Maint / Mgmt: −$2,998
• Net cashflow: $3,198/mo
• Annual: $38,372/yr
• Cap rate: 9.43%
• Cash-on-cash: 11.19%
• DSCR: 1.50
• 1% rule: 1.17%
• Cash to close: $343,000

Investor read

• This is a 6×4bd/2ba + 2×?bd/1ba units multifamily listed at $1.23M.
• At list price, monthly cash flow is $3k ($38k/yr) — positive. Per door: $400/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($14k rent vs $1.23M).
• It's been on market 173 days — a 12% lower offer ($1.08M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.08M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $37k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#195 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, health & safety A-; Watch: employment C-, crime F, cost of living F.
• Chico Unified (urban): math 40% / reading 70% proficiency, ranked #117 of 517 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+4.0%/yr); 90 active listings in the ZIP; 946 units permitted in Butte County in 2024 (254 in 5+ unit buildings).
• Butte County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 13 sale attempts since 10y ago; this cycle's ask has dropped $150k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $1.02M; 20% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 4.0% rent growth), your $343k cash investment doubles in ~9 years — after that, you're playing with house money.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 6→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.4% vs local median 2.6% in Chico — 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 $14,276/mo this rent would consume 277% of the median local household income ($62k/yr) (locally 3912% 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 173 days. Have you received any prior offers? Is the seller open to a 12% 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?
• 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.
• Schools are B-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.