1025 Martin #20

Lakeport, CA 95453

$52,000B-

2 bd · 2.0 ba · 1,440 sqft · Built 1978 · Land · Active · 51 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,000/mo
• Mortgage (P&I): −$273
• Tax + insurance: −$61
• HOA: −$0
• Vac / Maint / Mgmt: −$420
• Net cashflow: $1,246/mo
• Annual: $14,958/yr
• Cap rate: 35.06%
• Cash-on-cash: 102.73%
• DSCR: 5.57
• 1% rule: 3.85%
• Cash to close: $14,560

Investor read

• This is a 2-bed/2.0-bath land listed at $52k.
• At list price, monthly cash flow is $1k ($15k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $52k).
• It's been on market 51 days — a 3% lower offer ($50k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $50k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $360 of loan paydown is wiped out by about $2k 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).
• Market conditions: 150 active listings in the ZIP; 5 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $15k cash investment doubles in ~2 years — after that, you're playing with house money.
• Climate carrying-cost: 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 35.1% 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.
• This rent runs 34% of the median local income ($71k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• It's been on market 51 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1978 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• 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?
• 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.