2220 7th St

Berkeley, CA 94710

$899,000D

3 bd · 2.0 ba · 1,698 sqft · Built 1904 · MultiFamily · Active · 157 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,141/mo
• Mortgage (P&I): −$4,714
• Tax + insurance: −$933
• HOA: −$0
• Vac / Maint / Mgmt: −$1,290
• Net cashflow: $-796/mo
• Annual: $-9,557/yr
• Cap rate: 5.23%
• Cash-on-cash: -3.80%
• DSCR: 0.83
• 1% rule: 0.68%
• Cash to close: $251,720

Investor read

• This is a 3-bed/2.0-bath multifamily listed at $899k.
• At list price, monthly cash flow is $-796 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $758k (15.6% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $614k (31.7% below list).
• It's been on market 157 days — a 12% lower offer ($791k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $614k (31.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $27k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#74 in CA, #2,860 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; Watch: crime F, cost of living F.
• Berkeley Unified (urban): math 61% / reading 67% proficiency, ranked #175 of 1,400 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1904 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.2%/yr); 30 active listings in the ZIP; 29 comparable units currently listed for rent nearby; rentals leasing fast (median 4d on market — plan ~1-2 weeks tenant-placement turnaround); solid renter incomes; 1,742 units permitted in Alameda County in 2024 (856 in 5+ unit buildings).
• Alameda County population projected at +34% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Cap rate 5.2% vs local median 2.0% in Berkeley — 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 $6,141/mo this rent would consume 72% of the median local household income ($102k/yr) (locally 764% 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?
• It's been on market 157 days. Have you received any prior offers? Is the seller open to a 32% concession, seller financing, or rate buy-down credit?
• Built in 1904 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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 A-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?