small MFH in SF bay area - how can this possibly make money?

[Radai R.]

Hello,

This is my 1st time posting (guess i should head over and introduce myself...), so sorry if I leave anything important out below.

I've been thinking about small MFH for the past few weeks, and came across this near me -

https://www.realtor.com/realestateandhomes-detail/...

Its a 4 unit MFH. units are 3/1, 2/1 and 2 x 1/1, being sold for 1.5M$
I've guestimated the rents at 2700 2100 and 2 x 1800 by looking at similar neighbouring assets on hotpads.

Place seems to be freshly renovated, but no AC (which i think would be the biggest value add).

My problem is that however I try running the numbers it wont cash flow. Am I missing something or is the seller just completely off in their valuation?

Monthly income (only rents) - 8500 (the listing seems to indicate only a single unit is currently occupied, and at below-market rate).

Monthly expenses:

property taxes: 1500 assuming this will be 1.2% of the deal value of 1.5M. current assessment is ~330k -

https://www.sccassessor.org/index.php/all-situs-se...

management: 850. thats 10% of rent, not taking into account placement fees

vacancies: 425. this is assuming a 5% vacancy rate (may even be lower, market is hot) but doesnt take mgmt company placement fees.

water & sewer: ~415. thats according to city sewer rates and avg water bill. no details in the listing. listing says this is not metered per-tenant.

insurance: 375. zillow estimate. I didnt not verify.

garbage: 70$ (rough estimate looking at city rates)

TOTAL: 3635 (with mgmt company, assuming i do placement?). 2785 without management company.

If i take a standard mortgage (20% down, 30y term) the P&I is 6187, which means this property will lose money.

If i just plop down 1.5M in cash I get back 4% ROI with mgmt company, 4.5% without. probably worse as i have not budgeted for maintenance above (how do I do that)?

Depreciation - assuming the entire 1.5M is depreciated over 27.5 years means ~4500$/month that I can deduct from my income for federal tax purposes - so would need to multiply by my federal tax % to get an actual $ saved value (im a little hazy on these things, so please correct me if im wrong). doing so doesnt make this a cash-flowing deal with a mortgage, and still wont crack 5% ROI if i buy in cash.

finally, here's a link to the biggerpockets calculator for this -

https://www.biggerpockets.com/buy_and_hold_results...

So, is this a very unattractive deal or am I missing something here?