5301 E Commerce Way #44104

Sacramento, CA 95835

$349,900D-

3 bd · 2.5 ba · 1,354 sqft · Built 2022 · Condo · Pending · 18 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,924/mo
• Mortgage (P&I): −$1,835
• Tax + insurance: −$786
• HOA: −$515
• Vac / Maint / Mgmt: −$614
• Net cashflow: $-826/mo
• Annual: $-9,912/yr
• Cap rate: 3.89%
• Cash-on-cash: -8.58%
• DSCR: 0.62
• 1% rule: 0.84%
• Cash to close: $97,972

Investor read

• This is a 3-bed/2.5-bath condo listed at $350k.
• At list price, monthly cash flow is $-826 ($-10k/yr) — negative.
• To cash-flow at today's rent, offer at most $204k (41.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $292k (16.4% below list).
• It's been on market 18 days — a 2% lower offer ($345k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $204k (41.7% below list) — sets the bar for cash-flow.
• In year one you build about $35k of equity ($2k loan paydown + $32k appreciation (9.2% local appreciation)).
• Location reads 71/100 on livability (#218 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, housing A; Watch: crime F, cost of living F.
• Natomas Unified (urban): math 33% / reading 60% proficiency, ranked #155 of 517 in CA (top 30%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: H. Allen Hight Elementary (802 students, 59% FRL); Natomas Middle (662 students, 65% FRL); Inderkum High (math 39% / reading 66%, grade C-, #289 of 1,170 statewide, top 25%, 2,266 students, 39% FRL).
• Watch-outs: flood insurance adds $125/mo.
• Market conditions: Rents rising (+1.4%/yr); 408 active listings in the ZIP; 27 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 6,825 units permitted in Sacramento County in 2024 (1,752 in 5+ unit buildings).
• Sacramento County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• By year 2, paydown + projected appreciation supports a ~$55k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone A99 (mandatory federal flood insurance); moderate wildfire risk; extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.9% vs local median 3.0% in Sacramento — 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 31% of the median local income ($114k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?
• 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?