3939 Madison Ave #146

North Highlands, CA 95660

$152,500D

2 bd · 2.0 ba · 826 sqft · Built 1985 · Condo · Active · 358 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,832/mo
• Mortgage (P&I): −$800
• Tax + insurance: −$221
• HOA: −$671
• Vac / Maint / Mgmt: −$385
• Net cashflow: $-244/mo
• Annual: $-2,934/yr
• Cap rate: 4.37%
• Cash-on-cash: -6.87%
• DSCR: 0.69
• 1% rule: 1.20%
• Cash to close: $42,700

Investor read

• This is a 2-bed/2.0-bath condo listed at $152k.
• At list price, monthly cash flow is $-244 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $109k (28.3% below list).
• Meets the 1% rule at list price ($2k rent vs $152k).
• It's been on market 358 days — a 12% lower offer ($134k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $109k (28.3% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#523 in CA) — a middle-class / working-renter tenant base. Strengths: housing A+; Watch: employment C-, crime F, amenities F.
• Twin Rivers Unified (suburban): math 29% / reading 37% proficiency, ranked #970 of 1,400 in CA (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Madison Elementary (706 students, 95% FRL); Foothill Ranch Middle (453 students, 94% FRL); Foothill High (1,251 students, 91% FRL) — zoned schools average 93% FRL vs 76% district-wide (17 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: HOA is 37% of rent.
• Market conditions: Rents rising fast (+5.7%/yr); 110 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• This rent runs 32% of the median local income ($68k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 358 days. Have you received any prior offers? Is the seller open to a 28% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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?