618 Plaza Ave

Sacramento, CA 95815

$5,060,000B-

45 bd · 1.0 ba · 12,348 sqft · Built 1959 · MultiFamily · Active · 42 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $67,158/mo
• Mortgage (P&I): −$26,535
• Tax + insurance: −$4,024
• HOA: −$0
• Vac / Maint / Mgmt: −$14,103
• Net cashflow: $22,495/mo
• Annual: $269,944/yr
• Cap rate: 11.63%
• Cash-on-cash: 19.05%
• DSCR: 1.85
• 1% rule: 1.33%
• Cash to close: $1,416,800

Investor read

• This is a 45-bed/1.0-bath multifamily listed at $5.06M.
• At list price, monthly cash flow is $22k ($270k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($67k rent vs $5.06M).
• It's been on market 42 days — a 3% lower offer ($4.91M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $4.91M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $35k of loan paydown is wiped out by about $152k of value loss. Plan a longer hold.
• Location reads 71/100 on livability (#218 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A; Watch: schools D+, crime F, cost of living F.
• Twin Rivers Unified (suburban): math 29% / reading 37% proficiency, ranked #970 of 1,400 in CA (top 69%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.5%/yr); 98 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.
• At projected returns (-3.0% appreciation + 1.5% rent growth), your $1.42M cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: major flood risk; extreme-heat days projected 7→14/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.6% vs local median 3.0% in Sacramento — 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 $67,158/mo this rent would consume 1341% of the median local household income ($60k/yr) (locally 1877% 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 42 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1959 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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.
• 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.