135 Liberty

Newport Beach, CA 92660

$625,000D

2 bd · 2.0 ba · 1,152 sqft · Built 2009 · Manufactured · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,190/mo
• Mortgage (P&I): −$3,278
• Tax + insurance: −$1,042
• HOA: −$0
• Vac / Maint / Mgmt: −$1,090
• Net cashflow: $-219/mo
• Annual: $-2,632/yr
• Cap rate: 5.87%
• Cash-on-cash: -1.50%
• DSCR: 0.93
• 1% rule: 0.83%
• Cash to close: $175,000

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $625k.
• At list price, monthly cash flow is $-219 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $593k (5.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $519k (17.0% below list).
• It's been on market 19 days — a 2% lower offer ($616k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $519k (17.0% below list) — sets the bar for 1% rule.
• In year one you build about $67k of equity ($4k loan paydown + $62k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#101 in CA, #3,645 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, employment A+; Watch: health & safety C-, cost of living F.
• Market conditions: Rents rising fast (+4.1%/yr); 154 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 55% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 16y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• By year 2, paydown + projected appreciation supports a ~$107k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.9% vs local median 0.6% in Newport Beach — 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.
• This rent runs 39% of the median local income ($160k/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?
• 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?
• 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?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.