2072 Hidden Valley Cyn

Laguna Beach, CA 92651

$1,999,000D-

3 bd · 2.0 ba · 1,587 sqft · Built 2000 · SingleFamily · Active · 96 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,301/mo
• Mortgage (P&I): −$10,483
• Tax + insurance: −$2,387
• HOA: −$125
• Vac / Maint / Mgmt: −$2,163
• Net cashflow: $-4,857/mo
• Annual: $-58,287/yr
• Cap rate: 3.38%
• Cash-on-cash: -10.41%
• DSCR: 0.54
• 1% rule: 0.52%
• Cash to close: $559,720

Investor read

• This is a 3-bed/2.0-bath single-family listed at $2.00M.
• At list price, monthly cash flow is $-5k ($-58k/yr) — negative.
• To cash-flow at today's rent, offer at most $1.14M (42.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.03M (48.5% below list).
• It's been on market 96 days — a 9% lower offer ($1.82M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.03M (48.5% below list) — sets the bar for 1% rule.
• In year one you build about $138k of equity ($14k loan paydown + $124k appreciation (6.2% local appreciation)).
• Location reads 68/100 on livability (#276 in CA) — a middle-class / working-renter tenant base. Strengths: schools A+, employment A+, crime A; Watch: commute D+, amenities F, cost of living F.
• Laguna Beach Unified (suburban): math 25% / reading 25% proficiency, ranked #343 of 517 in CA (top 66%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; only 8% free/reduced lunch — higher-income household profile.
• Market conditions: Rents soft (-0.2%/yr); 221 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 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.
• 9 sale attempts since 25y 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 $1.70M; 18% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 2, paydown + projected appreciation supports a ~$220k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.4% vs local median 0.7% in Laguna Beach — 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 $10,301/mo this rent would consume 84% of the median local household income ($147k/yr) (locally 1265% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 96 days. Have you received any prior offers? Is the seller open to a 48% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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 A-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.