519 Webster

Palo Alto, CA 94301

$6,495,000D-

3 bd · 4.0 ba · 4,441 sqft · Built 2019 · Townhouse · Active · 25 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $5,964/mo
• Mortgage (P&I): −$34,060
• Tax + insurance: −$8,902
• HOA: −$0
• Vac / Maint / Mgmt: −$1,252
• Net cashflow: $-38,250/mo
• Annual: $-459,006/yr
• Cap rate: -0.75%
• Cash-on-cash: -25.14%
• DSCR: -0.12
• 1% rule: 0.09%
• Cash to close: $1,818,600

Investor read

• This is a 3-bed/4.0-bath townhouse listed at $6.50M.
• At list price, monthly cash flow is $-38k ($-459k/yr) — negative.
• To cash-flow at today's rent, offer at most $660k (89.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $596k (90.8% below list).
• It's been on market 25 days — a 2% lower offer ($6.40M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $596k (90.8% below list) — sets the bar for 1% rule.
• In year one you build about $106k of equity ($45k loan paydown + $61k appreciation (0.9% local appreciation)).
• Location reads 84/100 on livability (#19 in CA, #821 nationally) — a professional / high-income tenant draw. Strengths: amenities A+, commute A+, employment A+; Watch: cost of living F.
• Palo Alto Unified (urban): math 79% / reading 80% proficiency, ranked #19 of 517 in CA (top 4%) — strong family-tenant draw, lease renewals of 3-5y typical; only 7% free/reduced lunch — higher-income household profile.
• Zoned schools: Ohlone Elementary (math 81% / reading 81%, grade A+, #54 of 1,571 statewide, top 3%, 463 students, 7% FRL); Frank S. Greene Jr. Middle (math 74% / reading 77%, grade A, #24 of 498 statewide, top 5%, 755 students, 13% FRL); Palo Alto High (math 87% / reading 87%, grade A, #21 of 1,170 statewide, top 2%, 1,992 students, 10% FRL) — zoned schools at 10% FRL track the district average.
• Watch-outs: flood insurance adds $152/mo.
• Market conditions: Rents rising fast (+7.4%/yr); 33 active listings in the ZIP; high-income renter base; 3,838 units permitted in Santa Clara County in 2024 (1,886 in 5+ unit buildings).
• Santa Clara County population projected at +24% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• By year 4, paydown + projected appreciation supports a ~$388k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone AH (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate -0.7% vs local median 0.4% in Palo Alto — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.

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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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?
• 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.