3711 46th Ave

Lemon Hill, CA 95824

$699,000C+

6 bd · 4.0 ba · 2,568 sqft · Built 1961 · MultiFamily · Active · 245 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,907/mo
• Mortgage (P&I): −$3,666
• Tax + insurance: −$815
• HOA: −$0
• Vac / Maint / Mgmt: −$1,870
• Net cashflow: $2,555/mo
• Annual: $30,666/yr
• Cap rate: 10.68%
• Cash-on-cash: 15.67%
• DSCR: 1.70
• 1% rule: 1.27%
• Cash to close: $195,720

Investor read

• This is a 4 × 6-bed/4.0-bath units multifamily listed at $699k.
• At list price, monthly cash flow is $3k ($31k/yr) — positive. Per door: $639/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $699k).
• It's been on market 245 days — a 12% lower offer ($615k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $615k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads 45/100 on livability (#1,302 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A; Watch: health & safety D, schools F, crime F.
• Sacramento City Unified (urban): math 32% / reading 43% proficiency, ranked #804 of 1,400 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising fast (+6.4%/yr); 67 active listings in the ZIP; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $475k; 47% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 6.4% rent growth), your $196k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.7% vs local median 3.8% in Lemon Hill — 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 $8,907/mo this rent would consume 189% of the median local household income ($56k/yr) (locally 1671% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 245 days. Have you received any prior offers? Is the seller open to a 12% 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?
• Built in 1961 — 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 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 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?