8294 N Heights

Soda Bay, CA 95451

$350,000D+

2 bd · 1.5 ba · 900 sqft · Built 1985 · MultiFamily · Active · 167 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,193/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$328
• HOA: −$36
• Vac / Maint / Mgmt: −$671
• Net cashflow: $323/mo
• Annual: $3,880/yr
• Cap rate: 7.40%
• Cash-on-cash: 3.96%
• DSCR: 1.18
• 1% rule: 0.91%
• Cash to close: $98,000

Investor read

• This is a 2 × 2-bed/1.5-bath units multifamily listed at $350k.
• At list price, monthly cash flow is $323 ($4k/yr) — positive. Per door: $162/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 $319k (8.8% below list).
• It's been on market 167 days — a 12% lower offer ($308k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $308k (12.0% 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 $10k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#595 in CA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+; Watch: health & safety C-, schools D-, crime F.
• Kelseyville Unified (town): math 18% / reading 33% proficiency, ranked #1,150 of 1,400 in CA (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: 268 active listings in the ZIP; 107 units permitted in Lake County in 2024 (40 in 5+ unit buildings).
• Lake County population projected at -15% by 2050 — secular population decline; favor cash flow + early exit over multi-decade hold.
• 2 sale attempts; this cycle's ask is 4% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $132k; list at $350k implies a 165% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 8→17/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.4% vs local median 3.6% in Soda Bay — 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 $3,193/mo this rent would consume 61% of the median local household income ($63k/yr) (locally 194% 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 167 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• 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 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?