1041 Calla Ave

Imperial Beach, CA 91932

$2,095,000D-

13 bd · 7.0 ba · 5,568 sqft · Built 1971 · MultiFamily · Pending · 22 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $17,835/mo
• Mortgage (P&I): −$10,986
• Tax + insurance: −$3,574
• HOA: −$0
• Vac / Maint / Mgmt: −$3,745
• Net cashflow: $-471/mo
• Annual: $-5,652/yr
• Cap rate: 6.02%
• Cash-on-cash: -0.96%
• DSCR: 0.96
• 1% rule: 0.85%
• Cash to close: $586,600

Investor read

• This is a 6×2bd/1ba + 1×1bd/1ba units multifamily listed at $2.10M.
• At list price, monthly cash flow is $-471 ($-6k/yr) — negative. Per door: $-67/mo.
• To cash-flow at today's rent, offer at most $2.01M (4.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.78M (14.9% below list).
• It's been on market 22 days — a 2% lower offer ($2.06M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.78M (14.9% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $14k of loan paydown is wiped out by about $63k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#573 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, housing B; Watch: crime D+, amenities F, cost of living F.
• Sweetwater Union High (suburban): math 36% / reading 52% proficiency, ranked #187 of 517 in CA (top 36%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Bayside Steam Academy (math 11% / reading 21%, grade F, #1,393 of 1,571 statewide, top 89%, 410 students, 71% FRL); Mar Vista Academy (math 17% / reading 27%, grade F, #388 of 498 statewide, top 80%, 552 students, 86% FRL); Mar Vista Senior High (math 22% / reading 42%, grade F, #674 of 1,170 statewide, top 59%, 1,376 students, 78% FRL) — zoned schools average 78% FRL vs 53% district-wide (25 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 23% at this address vs 44% district-wide (-21 pts) — the specific schools serving this property underperform the Sweetwater Union High average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising (+1.8%/yr); 139 active listings in the ZIP; solid renter incomes; 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 3y 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.
• Current owner paid $107k; list at $2.10M implies a 1858% gain — meaningful room to come down on a strong offer.
• Cap rate 6.0% vs local median 2.4% in Imperial 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.
• At $17,835/mo this rent would consume 249% of the median local household income ($86k/yr) (locally 1654% 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 1971 — 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 F-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?