110 E 2nd St

Hanford, CA 93230

$565,000C-

3 bd · 2.0 ba · 1,131 sqft · Built 1993 · MultiFamily · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,454/mo
• Mortgage (P&I): −$2,963
• Tax + insurance: −$530
• HOA: −$0
• Vac / Maint / Mgmt: −$1,145
• Net cashflow: $816/mo
• Annual: $9,792/yr
• Cap rate: 8.03%
• Cash-on-cash: 6.19%
• DSCR: 1.28
• 1% rule: 0.97%
• Cash to close: $158,200

Investor read

• This is a 3 × 3-bed/2.0-bath units multifamily listed at $565k.
• At list price, monthly cash flow is $816 ($10k/yr) — positive. Per door: $272/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $545k (3.5% below list).
• It's been on market 19 days — a 2% lower offer ($557k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $545k (3.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $17k of value loss. Plan a longer hold.
• Location reads 75/100 on livability (#121 in CA, #4,255 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, housing A+, amenities B; Watch: crime D+, health & safety D+, cost of living F.
• Hanford Joint Union High (urban): math 20% / reading 58% proficiency, ranked #765 of 1,400 in CA (top 55%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Market conditions: Rents rising (+2.9%/yr); 434 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 741 units permitted in Kings County in 2024 (307 in 5+ unit buildings).
• 3 sale attempts since 5y 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 $300k; list at $565k implies a 88% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: moderate wildfire risk; extreme-heat days projected 7→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.0% vs local median 3.9% in Hanford — 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 $5,454/mo this rent would consume 86% of the median local household income ($76k/yr) (locally 2081% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.