1640 - 1642 High St

Oroville, CA 95965

$270,000D-

2 bd · 2.0 ba · 1,120 sqft · Built 1930 · MultiFamily · Pending · 89 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,276/mo
• Mortgage (P&I): −$1,416
• Tax + insurance: −$361
• HOA: −$0
• Vac / Maint / Mgmt: −$478
• Net cashflow: $21/mo
• Annual: $257/yr
• Cap rate: 6.39%
• Cash-on-cash: 0.34%
• DSCR: 1.02
• 1% rule: 0.84%
• Cash to close: $75,600

Investor read

• This is a 2 × 1-bed/1.0-bath units multifamily listed at $270k.
• At list price, monthly cash flow is $21 ($257/yr) — positive. Per door: $11/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 $228k (15.7% below list).
• It's been on market 89 days — a 6% lower offer ($254k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $228k (15.7% 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 $8k of value loss. Plan a longer hold.
• Location reads 50/100 on livability (#1,136 in CA) — a working-class tenant base; expect higher turnover. Watch: cost of living D, crime F, amenities F.
• Oroville Union High (town): math 19% / reading 49% proficiency, ranked #300 of 517 in CA (top 58%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Oroville High (math 22% / reading 52%, grade F, #578 of 1,170 statewide, top 51%, 936 students, 86% FRL).
• Watch-outs: built in 1930 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.9%/yr); 167 active listings in the ZIP; 17 comparable units currently listed for rent nearby; rentals at typical pace (median 15d on market — plan ~3-4 weeks tenant-placement turnaround); 946 units permitted in Butte County in 2024 (254 in 5+ unit buildings).
• Butte County population projected at +10% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts since 6y ago; this cycle's ask is 70% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $195k; 38% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.4% vs local median 4.6% in Oroville — 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 $2,276/mo this rent would consume 51% of the median local household income ($53k/yr) (locally 892% 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 89 days. Have you received any prior offers? Is the seller open to a 16% concession, seller financing, or rate buy-down credit?
• 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?
• Built in 1930 — 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 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?