3047 David Ave

San Jose, CA 95128

$3,620,000C

252 bd · 196.0 ba · 8,076 sqft · Built 1958 · MultiFamily · Active · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $37,093/mo
• Mortgage (P&I): −$18,984
• Tax + insurance: −$5,265
• HOA: −$0
• Vac / Maint / Mgmt: −$7,790
• Net cashflow: $5,055/mo
• Annual: $60,656/yr
• Cap rate: 7.97%
• Cash-on-cash: 5.98%
• DSCR: 1.27
• 1% rule: 1.02%
• Cash to close: $1,013,600

Investor read

• This is a 10×1bd/1ba + 4×2bd/1ba units multifamily listed at $3.62M.
• At list price, monthly cash flow is $5k ($61k/yr) — positive. Per door: $361/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($37k rent vs $3.62M).
• It's been on market 66 days — a 6% lower offer ($3.40M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.40M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $25k of loan paydown is wiped out by about $109k of value loss. Plan a longer hold.
• Location reads 78/100 on livability (#68 in CA, #2,559 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime F, cost of living F.
• Campbell Union (suburban): math 51% / reading 58% proficiency, ranked #293 of 1,400 in CA (top 21%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Campbell School of Innovation (781 students, 22% FRL, charter).
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.9%/yr); 65 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.
• 2 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.
• Current owner paid $643k; list at $3.62M implies a 463% gain — meaningful room to come down on a strong offer.
• Cap rate 8.0% vs local median 1.6% in San Jose — 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 $37,093/mo this rent would consume 339% of the median local household income ($131k/yr) (locally 1774% 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 66 days. Have you received any prior offers? Is the seller open to a 6% 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 1958 — 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.
• 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.