65 Royale

Lakeport, CA 95453

$619,000C-

8 bd · 4.0 ba · 3,200 sqft · Built 1965 · MultiFamily · Active · 146 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,001/mo
• Mortgage (P&I): −$3,246
• Tax + insurance: −$1,323
• HOA: −$0
• Vac / Maint / Mgmt: −$1,260
• Net cashflow: $172/mo
• Annual: $2,061/yr
• Cap rate: 7.45%
• Cash-on-cash: 4.14%
• DSCR: 1.18
• 1% rule: 0.97%
• Cash to close: $173,320

Investor read

• This is a 4 × 2-bed/1-bath units multifamily listed at $619k.
• At list price, monthly cash flow is $172 ($2k/yr) — positive. Per door: $43/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 $600k (3.1% below list).
• It's been on market 146 days — a 12% lower offer ($545k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $545k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads 54/100 on livability (#925 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A; Watch: health & safety C-, employment D+, crime F.
• Lakeport Unified (town): math 13% / reading 30% proficiency, ranked #451 of 517 in CA (top 87%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Lakeport Elementary (math 17% / reading 27%, grade F, #1,179 of 1,571 statewide, top 78%, 394 students, 66% FRL); Terrace Middle (math 12% / reading 27%, grade F, #419 of 498 statewide, top 85%, 482 students, 66% FRL); Clear Lake High (math 17% / reading 47%, grade F, #674 of 1,170 statewide, top 59%, 357 students, 57% FRL).
• Watch-outs: flood insurance adds $427/mo.
• Market conditions: 150 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.
• 7 sale attempts since 11y 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.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wildfire 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 7.5% vs local median 3.1% in Lakeport — 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 $6,001/mo this rent would consume 101% of the median local household income ($71k/yr) (locally 250% 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 146 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?
• Built in 1965 — 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?