12970 Hwy 8 Business Spc 111

Winter Gardens, CA 92021

$219,000B-

4 bd · 2.0 ba · 1,344 sqft · Built 1972 · Land · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,436/mo
• Mortgage (P&I): −$1,148
• Tax + insurance: −$365
• HOA: −$0
• Vac / Maint / Mgmt: −$722
• Net cashflow: $1,201/mo
• Annual: $14,415/yr
• Cap rate: 12.88%
• Cash-on-cash: 23.51%
• DSCR: 2.05
• 1% rule: 1.57%
• Cash to close: $61,320

Investor read

• This is a 4-bed/2.0-bath land listed at $219k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $219k).
• It's been on market 31 days — a 3% lower offer ($212k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $212k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $7k of value loss. Plan a longer hold.
• Location reads 61/100 on livability (#515 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A-, housing A-; Watch: crime D-, amenities F, cost of living F.
• Grossmont Union High (suburban): math 31% / reading 60% proficiency, ranked #173 of 517 in CA (top 34%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; only 17% free/reduced lunch — higher-income household profile.
• Zoned schools: W. D. Hall Elementary (540 students, 81% FRL); Greenfield Middle (663 students, 84% FRL); El Capitan High (math 20% / reading 54%, grade F, #578 of 1,170 statewide, top 51%, 1,825 students, 52% FRL) — zoned schools average 72% FRL vs 17% district-wide (56 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents soft (-0.8%/yr); 244 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); 11,759 units permitted in San Diego County in 2024 (7,244 in 5+ unit buildings).
• San Diego County population projected at +20% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 39 sale attempts since 24y ago; this cycle's ask is 33% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $135k; list at $219k implies a 62% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $61k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 5→13/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.9% vs local median 2.6% in Winter Gardens — 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.
• At $3,436/mo this rent would consume 56% of the median local household income ($74k/yr) (locally 4178% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 31 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Built in 1972 — 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.
• Crime grade is D 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.