Issue #160May 29, 2026
Houston 32-Unit Value-Add (8.26% Stabilized) + Sacramento 4-Unit Distress + Phoenix 8-Unit + San Diego House Hack
Houston 32-unit fully renovated value-add: 5.51% in-place → 8.26% stabilized, 0.97x → 1.45x DSCR. Sacramento 4-plex at $197K/unit distress with approved ADU. Phoenix 8-unit stabilized. San Diego 3-unit house hack $150K entry.
VALUE-ADDDISTRESS + ADUSTABILIZEDHOUSE HACK
TOP PICK • VALUE-ADD8.5/10
5408 Market St, Houston, TX 77020
Buy & Hold Multifamily · 32 Units (Value-Add)$3,500,000
UNDERWRITING
Price / Unit
$109,375
Cap Rate (Stabilized)
8.26%
CoC (Stabilized)
10.3%
Cash Required
~$963K
Annual CF (Stab.)
$90K
DSCR (Stab.)
1.45x
Occupancy
100%
FINANCING
Down (25%)
$875K
Loan @ 6.5%
$2.625M
Annual Debt Svc
~$199K
OPPORTUNITY
100% renovated 2024, 100% occupied 32-unit garden style in East End Houston (OZ). In-place $900/unit vs $1,350 market — 50%+ upside. $500K+ documented capex already in. Stabilized NOI $289K yields strong returns once rents raised.
RISK
In-place DSCR 0.97x fails standard DSCR lender 1.20x test (uses current rents). Not passive Day-1. Class C neighborhood, high management touch. Confirm assumable existing Fannie Mae loan rate with broker before offering.
VERDICT
Top pick for experienced operator or Dealsletter power user with bridge/portfolio financing or assumable loan access. Once rents stabilized at market, this pencils at 1.45x DSCR and 10.3% CoC on $963K cash. $109K/unit entry in growing East End corridor.
DISTRESS • ADU UPSIDE7/10
921 Rivera Dr, Sacramento, CA 95838
Buy & Hold Multifamily · 4 Units (Distress + ADU)$788,800
UNDERWRITING
Price / Unit
$197,200
Cap Rate (Conservative)
5.75%
Cash Required
~$232K
Annual CF (Yr 1)
$504
ADU Upside
+$1.2-1.5K/mo
OPPORTUNITY
4 units (mix 3BR/2BR/1BR) at 100% occ, $78K gross stated. Opportunity Zone. Approved ADU plans could add $1.2-1.5K/mo. Rents below market. Distress sale = negotiation room to $720-750K.
RISK
Deferred maintenance — budget $15-25K Year 1 capex. Conservative DSCR only 1.01x (with maint); Year 1 dips to 0.68x if full deferred hit. Stated 9.9% cap is aggressive (no vacancy/expenses). Hands-on Year 1 required.
VERDICT
Best entry price of the batch for value-add buyer comfortable with $230K+ cash + $20K buffer. ADU + rent bumps can push to 60K+ NOI. Not passive; negotiate hard on price for the deferred maint tag.
STABILIZED • LOW RISK6.5/10
1017–1031 E Fairmount Ave, Phoenix, AZ 85014
Buy & Hold Multifamily · 8 Units (Stabilized)$2,100,000
UNDERWRITING
Price / Unit
$262,500
Cap Rate (Stated)
6.03%
Cash Required
~$578K
Annual CF
$7,219
DSCR
1.06x
Occupancy
100%
OPPORTUNITY
8-unit 1966 Class C, 100% occ, 6/8 units renovated, 3 garages + 4 carports (upside). Walkable Midtown Phoenix — strong demand. Genuine sleep-well asset if DSCR solved. 3.5 mi from employment centers.
RISK
DSCR 1.06x below 1.20x lender min at 6.5%. Implied avg rent ~$2,399/unit seems high for Class C — request actual rent roll to confirm NOI $126K. If rents overstated, DSCR worse. 70 days on market = motivation.
VERDICT
Ideal for 1031 buyer or first CRE acquisition prioritizing stability over yield. Negotiate 0.5-1pt seller concession to buy down rate to ~5.5% (DSCR ~1.24x) or $100K price reduction. Request rent roll immediately.
HOUSE HACK • FRESH8/10
3560-64 Sydney Pl, San Diego, CA 92116 (Normal Heights)
House Hack · 3 Units (SFR + 2 rear)$1,995,000
UNDERWRITING
Cash Entry (5% Conv)
~$150K
Gross Rent (rear 2)
$10,380/mo
Net Housing Cost
~$4,345/mo
Savings vs Market Rent
$1.7-3.7K/mo
ADU Potential
Yes (R-1 lot)
OPPORTUNITY
Front SFR (canyon views) for owner + 2 rear 1999-built 2BR/1BA @ $10,380/mo gross stated. R-1 lot 0.52 AC with ADU potential for 3rd income stream. Normal Heights is top-tier demand (walk score, restaurants, Balboa Park access). 13 days fresh on market.
RISK
Price exceeds FHA 3-unit limit ($1.708M). Listing says FHA accepted — verify with agent for workaround or 4th structure. Pure investment view: does not cash flow after PITI. Value is in owner-occupied housing arbitrage + equity.
VERDICT
Recommended: 5% conventional jumbo (~$150K cash to close). Net housing cost ~$4,345/mo vs $6-8K+ market SFR rent in area. Verify ADU feasibility and exact FHA terms. Excellent for buyer wanting to live in desirable SD at subsidized cost while building equity and collecting rents.
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