829 Villa Teresa Way #829

San Jose, CA 95123

$450,000D

3 bd · 2.0 ba · 1,550 sqft · Built 2014 · Manufactured · Active · 87 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,437/mo
• Mortgage (P&I): −$2,360
• Tax + insurance: −$750
• HOA: −$0
• Vac / Maint / Mgmt: −$722
• Net cashflow: $-395/mo
• Annual: $-4,735/yr
• Cap rate: 5.24%
• Cash-on-cash: -3.76%
• DSCR: 0.83
• 1% rule: 0.76%
• Cash to close: $126,000

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $450k. Condition is rated good.
• At list price, monthly cash flow is $-395 ($-5k/yr) — negative.
• To cash-flow at today's rent, offer at most $393k (12.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $344k (23.6% below list).
• It's been on market 87 days — a 6% lower offer ($423k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $344k (23.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $14k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#68 in CA, #2,559 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• San Jose Unified (urban): math 39% / reading 52% proficiency, ranked #149 of 517 in CA (top 29%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Allen At Steinbeck (math 13% / reading 28%, grade F, #1,237 of 1,571 statewide, top 79%, 394 students, 66% FRL); Castillero Middle (math 43% / reading 59%, grade C, #93 of 498 statewide, top 19%, 881 students, 31% FRL); Gunderson High (math 30% / reading 30%, grade F, #715 of 1,170 statewide, top 62%, 921 students, 54% FRL).
• Market conditions: Rents rising (+3.8%/yr); 186 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 88d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 75% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 2 sale attempts; this cycle's ask has dropped $49k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Climate carrying-cost: extreme-heat days projected 8→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.2% vs local median 1.6% in San Jose — 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.

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 87 days. Have you received any prior offers? Is the seller open to a 24% concession, seller financing, or rate buy-down credit?
• 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.
• 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?
• 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.
• 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.