3289 State Highway 70 Spc 6A

Palermo, CA 95965

$75,000B-

3 bd · 2.0 ba · 1,065 sqft · Built 2019 · Manufactured · Active · 135 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,685/mo
• Mortgage (P&I): −$393
• Tax + insurance: −$104
• HOA: −$0
• Vac / Maint / Mgmt: −$354
• Net cashflow: $833/mo
• Annual: $10,000/yr
• Cap rate: 19.63%
• Cash-on-cash: 47.62%
• DSCR: 3.12
• 1% rule: 2.25%
• Cash to close: $21,000

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $75k.
• At list price, monthly cash flow is $833 ($10k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $75k).
• It's been on market 135 days — a 12% lower offer ($66k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $66k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $519 of loan paydown is wiped out by about $2k of value loss. Plan a longer hold.
• Location reads 48/100 on livability (#1,219 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing B+; Watch: schools F, crime F, amenities F.
• Palermo Union Elementary (town): math 20% / reading 33% proficiency, ranked #1,149 of 1,400 in CA (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 72% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+1.9%/yr); 167 active listings in the ZIP; 946 units permitted in Butte County in 2024 (254 in 5+ unit buildings).
• Butte County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• At projected returns (-3.0% appreciation + 1.9% rent growth), your $21k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 6→12/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 19.6% vs local median 3.8% in Palermo — 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.
• This rent runs 38% of the median local income ($53k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 135 days. Have you received any prior offers? Is the seller open to a 12% 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.
• Schools are F-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 for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.