2240 #38 Golden Oak Ln #38

Merced, CA 95341

$49,000B+

2 bd · 1.0 ba · 1,152 sqft · Built 1973 · Manufactured · Active · 128 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,654/mo
• Mortgage (P&I): −$257
• Tax + insurance: −$156
• HOA: −$0
• Vac / Maint / Mgmt: −$347
• Net cashflow: $894/mo
• Annual: $10,724/yr
• Cap rate: 31.17%
• Cash-on-cash: 88.86%
• DSCR: 4.95
• 1% rule: 3.38%
• Cash to close: $13,720

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $49k.
• At list price, monthly cash flow is $894 ($11k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $49k).
• It's been on market 128 days — a 12% lower offer ($43k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $43k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $339 of loan paydown is wiped out by about $1k of value loss. Plan a longer hold.
• Location reads 73/100 on livability (#153 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A+; Watch: schools D, employment D, crime F.
• Merced Union High (urban): math 20% / reading 46% proficiency, ranked #301 of 517 in CA (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: flood insurance adds $122/mo.
• Market conditions: Rents rising (+1.7%/yr); 170 active listings in the ZIP; 15 comparable units currently listed for rent nearby; rentals at typical pace (median 14d on market — plan ~3-4 weeks tenant-placement turnaround); 459 units permitted in Merced County in 2024 (0 in 5+ unit buildings).
• Merced County population projected at +12% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts; this cycle's ask has dropped $20k (29%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 1.7% rent growth), your $14k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: in FEMA flood zone AO (mandatory federal flood insurance); severe wildfire risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 31.2% vs local median 3.4% in Merced — 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 35% of the median local income ($57k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 128 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1973 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 D-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?
• 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.