1106-1108 Masonic Ave

San Francisco, CA 94117

$2,700,000D-

6 bd · 2.0 ba · 3,300 sqft · Built 1906 · MultiFamily · Pending · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $15,121/mo
• Mortgage (P&I): −$14,159
• Tax + insurance: −$1,881
• HOA: −$0
• Vac / Maint / Mgmt: −$3,175
• Net cashflow: $-4,094/mo
• Annual: $-49,129/yr
• Cap rate: 4.47%
• Cash-on-cash: -6.50%
• DSCR: 0.71
• 1% rule: 0.56%
• Cash to close: $756,000

Investor read

• This is a 2 × 3-bed/?-bath units multifamily listed at $2.70M.
• At list price, monthly cash flow is $-4k ($-49k/yr) — negative. Per door: $-2k/mo.
• To cash-flow at today's rent, offer at most $1.98M (26.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.51M (44.0% below list).
• It's been on market 17 days — a 2% lower offer ($2.66M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.51M (44.0% below list) — sets the bar for 1% rule.
• In year one you build about $269k of equity ($19k loan paydown + $250k appreciation (9.3% local appreciation)).
• Location reads 76/100 on livability (#90 in CA, #3,143 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• San Francisco Unified (urban): math 50% / reading 56% proficiency, ranked #322 of 1,400 in CA (top 23%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1906 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+18.2%/yr); 71 active listings in the ZIP; 1 comparable units currently listed for rent nearby; high-income renter base; 750 units permitted in San Francisco County in 2024 (688 in 5+ unit buildings).
• San Francisco County population projected at +39% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$432k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 4.5% vs local median 2.1% in San Francisco — 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 $15,121/mo this rent would consume 109% of the median local household income ($167k/yr) (locally 1811% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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?
• 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 1906 — 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 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?
• 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?