3974-78 Kansas St

San Diego, CA 92104

$1,699,000D+

20 bd · 16.0 ba · — sqft · Built 1930 · MultiFamily · Active · 97 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $17,325/mo
• Mortgage (P&I): −$8,910
• Tax + insurance: −$2,832
• HOA: −$0
• Vac / Maint / Mgmt: −$3,638
• Net cashflow: $1,945/mo
• Annual: $23,344/yr
• Cap rate: 7.67%
• Cash-on-cash: 4.91%
• DSCR: 1.22
• 1% rule: 1.02%
• Cash to close: $475,720

Investor read

• This is a 4 × 5-bed/?-bath units multifamily listed at $1.70M. Condition is rated poor.
• At list price, monthly cash flow is $2k ($23k/yr) — positive. Per door: $486/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($17k rent vs $1.70M).
• It's been on market 97 days — a 9% lower offer ($1.55M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.55M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $12k of loan paydown is wiped out by about $51k 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: Jefferson Elementary (378 students, 57% 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).
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.4%/yr); 174 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.
• 2 sale attempts 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 $1.20M; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.7% 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 $17,325/mo this rent would consume 221% of the median local household income ($94k/yr) (locally 3114% 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 97 days. Have you received any prior offers? Is the seller open to a 9% 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1930 — 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 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?

Repairs flagged (vision-AI assessment)

• Major: roof — Severe damage and weathering
• Major: exterior walls — Significant structural damage
• Major: flooring — Worn and uneven
• Major: interior walls/paint — Paint peeling and walls damaged
• Major: HVAC/mechanicals — No visible signs of recent maintenance