559 Mountain Home Dr #559

San Jose, CA 95136

$429,900F

3 bd · 2.0 ba · 1,440 sqft · Built 1973 · Manufactured · Active · 85 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,105/mo
• Mortgage (P&I): −$2,254
• Tax + insurance: −$784
• HOA: −$0
• Vac / Maint / Mgmt: −$652
• Net cashflow: $-586/mo
• Annual: $-7,034/yr
• Cap rate: 4.85%
• Cash-on-cash: -5.17%
• DSCR: 0.77
• 1% rule: 0.72%
• Cash to close: $120,372

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $430k.
• At list price, monthly cash flow is $-586 ($-7k/yr) — negative.
• To cash-flow at today's rent, offer at most $345k (19.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $310k (27.8% below list).
• It's been on market 85 days — a 6% lower offer ($404k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $310k (27.8% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $13k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#68 in CA, #2,559 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• East Side Union High (urban): math 53% / reading 70% proficiency, ranked #69 of 517 in CA (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Shirakawa (George Sr.) Elementary (633 students, 49% FRL); Bridges Academy (287 students, 72% FRL); Evergreen Valley High (math 76% / reading 83%, grade A-, #45 of 1,170 statewide, top 4%, 2,767 students, 13% FRL).
• Zoned-school proficiency averages 80% at this address vs 62% district-wide (+18 pts) — the actual schools serving this property are materially stronger than the East Side Union High average implies; a family-tenant draw the district grade alone would hide.
• Watch-outs: flood insurance adds $68/mo.
• Market conditions: Rents rising (+3.4%/yr); 89 active listings in the ZIP; 31 comparable units currently listed for rent nearby; rentals leasing fast (median 1d on market — plan ~1-2 weeks tenant-placement turnaround); high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 3 sale attempts since 21y ago; this cycle's ask has dropped $29k (6%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $90k; list at $430k implies a 378% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe flood risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.8% vs local median 1.6% in San Jose — 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.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 85 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.
• 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?
• 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?