123 Madrid

Tustin, CA 92780

$274,000C+

3 bd · 2.0 ba · 1,325 sqft · Built 2005 · Manufactured · Active · 50 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,643/mo
• Mortgage (P&I): −$1,437
• Tax + insurance: −$457
• HOA: −$0
• Vac / Maint / Mgmt: −$765
• Net cashflow: $985/mo
• Annual: $11,817/yr
• Cap rate: 10.61%
• Cash-on-cash: 15.40%
• DSCR: 1.69
• 1% rule: 1.33%
• Cash to close: $76,720

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $274k.
• At list price, monthly cash flow is $985 ($12k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $274k).
• It's been on market 50 days — a 3% lower offer ($266k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $266k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $8k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#215 in CA) — a middle-class / working-renter tenant base. Strengths: employment A+, commute B; Watch: health & safety D+, cost of living F.
• Tustin Unified (urban): math 46% / reading 65% proficiency, ranked #91 of 517 in CA (top 18%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising fast (+4.1%/yr); 70 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 16d on market — plan ~3-4 weeks tenant-placement turnaround); solid renter incomes; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 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.
• At projected returns (-3.0% appreciation + 4.1% rent growth), your $77k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 6→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 10.6% vs local median 1.9% in Tustin — 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.
• This rent runs 43% of the median local income ($101k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 50 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.