237 Spruce St

San Diego, CA 92103

$4,425,000D-

14 bd · 13.0 ba · 7,995 sqft · Built 1980 · MultiFamily · Pending · 181 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $35,106/mo
• Mortgage (P&I): −$23,205
• Tax + insurance: −$5,629
• HOA: −$0
• Vac / Maint / Mgmt: −$7,372
• Net cashflow: $-1,101/mo
• Annual: $-13,209/yr
• Cap rate: 5.99%
• Cash-on-cash: -1.07%
• DSCR: 0.95
• 1% rule: 0.79%
• Cash to close: $1,239,000

Investor read

• This is a 1×2bd/1.0ba + 12×1bd/1.0ba + 1×?bd/1.0ba units multifamily listed at $4.42M.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative. Per door: $-79/mo.
• To cash-flow at today's rent, offer at most $4.23M (4.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $3.51M (20.7% below list).
• It's been on market 181 days — a 12% lower offer ($3.89M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.51M (20.7% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $31k of loan paydown is wiped out by about $133k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#123 in CA, #4,206 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: health & safety C-, crime D+, cost of living F.
• San Diego Unified (urban): math 19% / reading 29% proficiency, ranked #393 of 517 in CA (top 76%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Florence Elementary (math 24% / reading 24%, grade F, #973 of 1,571 statewide, top 73%, 211 students, 69% FRL); Roosevelt International Middle (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 761 students, 59% FRL); San Diego High (2,105 students, 62% FRL).
• Market conditions: Rents rising (+1.2%/yr); 221 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 4y 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.
• Cap rate 6.0% vs local median 2.0% in San Diego — 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 $35,106/mo this rent would consume 410% of the median local household income ($103k/yr) (locally 2543% 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 181 days. Have you received any prior offers? Is the seller open to a 21% concession, seller financing, or rate buy-down credit?
• 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?
• 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 B-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 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?