3916 44th Ave

Lemon Hill, CA 95824

$399,000D+

4 bd · 2.0 ba · 1,352 sqft · Built 1989 · MultiFamily · Active · 8 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,113/mo
• Mortgage (P&I): −$2,092
• Tax + insurance: −$349
• HOA: −$0
• Vac / Maint / Mgmt: −$654
• Net cashflow: $18/mo
• Annual: $213/yr
• Cap rate: 6.35%
• Cash-on-cash: 0.19%
• DSCR: 1.01
• 1% rule: 0.78%
• Cash to close: $111,720

Investor read

• This is a 2 × 2-bed/1.0-bath units multifamily listed at $399k.
• At list price, monthly cash flow is $18 ($213/yr) — positive. Per door: $9/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $311k (22.0% below list).
• Only 8 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $311k (22.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $12k of value loss. Plan a longer hold.
• Location reads 45/100 on livability (#1,302 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A; Watch: health & safety D, crime F, amenities F.
• Sacramento City Unified (urban): math 32% / reading 43% proficiency, ranked #804 of 1,400 in CA (top 57%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 63% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Leonardo Da Vinci (797 students, 35% FRL); Fern Bacon Middle (671 students, 92% FRL); C. K. Mcclatchy High (2,427 students, 56% FRL) — zoned schools at 61% FRL track the district average.
• Market conditions: Rents rising fast (+6.4%/yr); 67 active listings in the ZIP; 14 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• Current owner paid $65k; list at $399k implies a 514% gain — meaningful room to come down on a strong offer.
• 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.
• Cap rate 6.3% vs local median 3.8% in Lemon Hill — 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 $3,113/mo this rent would consume 66% of the median local household income ($56k/yr) (locally 1671% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• 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?
• 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.