[Calc Review] Help me analyze this deal

[Adam K Garrett-Clark]

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*This link comes directly from our calculators, based on information input by the member who posted.

Hey Everyone, looking for help telling the financial story of this investment opportunity. Seems to be a really smart place to park cash at 6% Cap rate, with depreciation tax benefits and projected equity increases in the 23-30% range in the next 3 years. But financing even with 50% down seems to violate the 50% rule. Ful disclosure, I'm an investor and a also a Realtor that is listing this property. trying to get my head around what type of buyer this is a slam dunk case for.  

[Sean Haley]

A 6% CR doesn't strike me as a slam dunk. From just the photos, it appears to be a value-add opportunity at best. With school scores at 3/2/2 and what seems to be significant risk involved, an investor might consider better options like investing in a high-yielding savings account earning 5.5% without the associated risks. For a property like this, even in California, I would anticipate at least a +7% CR.

Additionally, betting on appreciation is speculative and not the best approach to long-term investing. Buy and hold investments should be considered based on their cashflow, not appreciation potential.