In San Diego at the current rates for a purchase loan (which has better rates than an ADU additions) at high LTV, I show 1% does not cash flow on a sustained basis.  

They offer free pre-qualification on their website where you can enter your data points to see available terms and rates.

Another option is to estimate value based on potential income and market cap rates, which can give you an investor’s perspective.

This for us is preferred over seller financed deals as we can do 65% LTV, 800 credit with someone who has net work 2x+ loan and get double digit rates. 3.

When it's sold it will be taxed as capital gains tax and may also have some unrecaptured depreciation which is capped at 25% and  recaptured depreciation as well which can be up to your ordinary income tax rate.

If their interest rate is 4% on those, then they are “making” the equivalent rate of return (4%) as the DST scenario you outlined above.

On a daily basis I get questions from investors/property owners about the rental rate for their rental property.

Prior to viewing with clients, I am usually have an idea of the general area, vacany rates, market rents, and property types that suitable for LTR.

We are planning to hold it for 5 years and bought a rate cap to cover the entire hold period. 

TERMS- Deal Type: Seller Finance- List Price: $580,000- Purchase Price: $780,000- Seller Carryback: $693,000- Total Entry: $100,000 Breakdown: Assignment: $13,000 Down: $87,000- PITI: $2,657 Breakdown: Principal & Interest:: $2,000 Taxes: $464Insurance: $193- Rent: $5,250 ($750-800 per unit)- Amortization Years: 28.88- Interest rate: 0%- HOA: NONE- Balloon: NONE- EMD: $5,500- COE: Feb 12, 2025- Occupancy: Occupied, Occupants staying post closing- Title company: PROPERTY DETAILS:MULIT-FAMILY7 Units - 2B/1B per unit- Living sqft: 5,200- Year Built: 1940- Age of Roof: 1- Age of HVAC: New- Age of Water heater: New- Condition of Electrical: Good working condition- Condition of Plumbing: Good working condition