36563 Frangipani Dr

French Valley, CA 92596

$570,335D

5 bd · 3.0 ba · 2,149 sqft · Built 2026 · Townhouse · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,046/mo
• Mortgage (P&I): −$2,991
• Tax + insurance: −$951
• HOA: −$153
• Vac / Maint / Mgmt: −$850
• Net cashflow: $-898/mo
• Annual: $-10,779/yr
• Cap rate: 4.40%
• Cash-on-cash: -6.75%
• DSCR: 0.70
• 1% rule: 0.71%
• Cash to close: $159,694

Investor read

• This is a 5-bed/3.0-bath townhouse listed at $570k. Condition is rated good.
• At list price, monthly cash flow is $-898 ($-11k/yr) — negative.
• To cash-flow at today's rent, offer at most $440k (22.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $405k (29.1% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $405k (29.1% below list) — sets the bar for 1% rule.
• In year one you build about $61k of equity ($4k loan paydown + $57k appreciation (10.0% local appreciation)).
• Location reads 59/100 on livability (#655 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+, housing A+; Watch: crime D-, amenities F, commute F.
• Temecula Valley Unified (urban): math 55% / reading 69% proficiency, ranked #173 of 1,400 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: French Valley Elementary (880 students, 24% FRL); Bella Vista Middle (1,396 students, 26% FRL); Chaparral High (3,030 students, 27% FRL).
• Market conditions: Rents soft (-0.8%/yr); 509 active listings in the ZIP; 20 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); 40% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$98k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.4% vs local median 3.4% in French Valley — 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 37% of the median local income ($133k/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?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 D 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?
• 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.