1402 N Morrison Ave

August, CA 95205

$305,000D

3 bd · 1.0 ba · 1,110 sqft · Built 1977 · SingleFamily · Active · 65 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,272/mo
• Mortgage (P&I): −$1,599
• Tax + insurance: −$233
• HOA: −$0
• Vac / Maint / Mgmt: −$477
• Net cashflow: $-37/mo
• Annual: $-450/yr
• Cap rate: 6.15%
• Cash-on-cash: -0.53%
• DSCR: 0.98
• 1% rule: 0.74%
• Cash to close: $85,400

Investor read

• This is a 3-bed/1.0-bath single-family listed at $305k.
• At list price, monthly cash flow is $-37 ($-450/yr) — negative.
• To cash-flow at today's rent, offer at most $298k (2.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $227k (25.5% below list).
• It's been on market 65 days — a 6% lower offer ($287k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $227k (25.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $9k of value loss. Plan a longer hold.
• Location reads 51/100 on livability (#1,074 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A-; Watch: cost of living D, crime F, amenities F.
• Stockton Unified (urban): math 23% / reading 46% proficiency, ranked #295 of 517 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: King Elementary (987 students, 84% FRL); Cesar Chavez High (math 26% / reading 41%, grade F, #656 of 1,170 statewide, top 57%, 2,257 students, 68% FRL) — zoned schools at 76% FRL track the district average.
• Market conditions: 87 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 3,779 units permitted in San Joaquin County in 2024 (0 in 5+ unit buildings).
• San Joaquin County population projected at +17% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: extreme-heat days projected 7→15/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $2,272/mo this rent would consume 45% of the median local household income ($60k/yr) (locally 1712% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

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 65 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Built in 1977 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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?