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- #115: Santa Rosa 39-Unit Cottage Goldmine + California Cash Cows
#115: Santa Rosa 39-Unit Cottage Goldmine + California Cash Cows
Santa Rosa cottage complex with 9% cap potential and ADU upside, Walnut Grove 13-unit with 9.37% current cap, Kansas City BRRRR with 65% capital recovery, and San Jose flip with $400K+ equity
Kevin
September 10, 2025
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Santa Rosa Cottages - 39-UNIT GARDEN-STYLE GOLDMINE
đź“Ť Address: 1855 Petaluma Hill Rd, Santa Rosa, CA 95404
đź’° Price: $6,500,000 ($166,667/unit)
🏢 Property: 39 Units - Unique Cottage-Style Complex on 2.35 Acres
🏦 Cap Rate: 7.02% Current | Potential: 9.8% | Development: Massive ADU Upside
Why This is a Great Investment:
Individual cottage-style units on 2.35 acres with no shared walls! This unique property configuration commands premium rents and tenant loyalty while offering massive development potential. At $166K/unit with a 7% cap rate in expensive Sonoma County, plus the ability to add 8-15 ADUs on the oversized lot, this represents institutional returns with unprecedented upside in Wine Country.
The cottage configuration eliminates typical apartment headaches while the acreage provides a clear development path that could double the property's value.
Current Performance đź“ť
Investment Metrics (25% Down) | |
|---|---|
Purchase Price | $6,500,000 |
Down Payment | $1,625,000 |
Purchase Costs | $195,000 |
Total Cash Required | $1,820,000 |
Current NOI (7.02%) | $456,300/year |
Current Cash Flow | $57,240/year |
Current Cash-on-Cash | 3.5% |
Value-Add Strategy 🚀
Rent Optimization Opportunity | Current | Market | Monthly Increase |
|---|---|---|---|
Studios (20 units) | $1,400 | $1,600 | +$4,000 |
1BR (13 units) | $1,700 | $2,100 | +$5,200 |
2BR (4 units) | $2,100 | $2,500 | +$1,600 |
3BR (2 units) | $2,800 | $3,300 | +$1,000 |
Total Monthly Increase | +$11,800 |
Stabilized Performance | |
|---|---|
New Annual Income | $910,800 |
Operating Expenses (30%) | $273,240 |
New NOI | $637,560 |
New Cash Flow | $238,140/year |
Stabilized Cash-on-Cash | 14.6% |
ADU Development Goldmine 🏗️
Development Potential Analysis | |
|---|---|
Current Density | 16.6 units/acre |
Allowable Density | 20-30 units/acre |
Additional Unit Potential | 8-15 ADUs |
Development Cost | $150K per ADU |
Total Development Investment | $1.2M-2.25M |
Development Returns | |
|---|---|
Additional Monthly Rent | $16,000-30,000 |
Additional Annual NOI | $192,000-360,000 |
Projected Total Value (7% cap) | $11.85M-14.25M |
Total Equity Creation | $5.35M-7.75M |
Key Success Factors:
Individual cottages command 15-20% premium over apartments
2.35 acres provides exceptional development rights
Wine Country location supports premium pricing
No shared walls reduces operational headaches
How 433 Investors Unlocked 400X Return Potential
Institutional investors back startups to unlock outsized returns. Regular investors have to wait. But not anymore. Thanks to regulatory updates, some companies are doing things differently.
Take Revolut. In 2016, 433 regular people invested an average of $2,730. Today? They got a 400X buyout offer from the company, as Revolut’s valuation increased 89,900% in the same timeframe.
Founded by a former Zillow exec, Pacaso’s co-ownership tech reshapes the $1.3T vacation home market. They’ve earned $110M+ in gross profit to date, including 41% YoY growth in 2024 alone. They even reserved the Nasdaq ticker PCSO.
The same institutional investors behind Uber, Venmo, and eBay backed Pacaso. And you can join them. But not for long. Pacaso’s investment opportunity ends September 18.
Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.
Walnut Grove Cottages - 13-UNIT CASH COW with 9.37% CAP
đź“Ť Address: 13991 River Rd, Walnut Grove, CA 95690
đź’° Price: $1,350,000 ($103,846/unit)
🏢 Property: 13 Detached Single-Story Cottages on 1.52 Acres
🏦 Cap Rate: 9.37% Current | Potential: 12.56% with RUBS | CoC: 24.3% Optimized
Why This is a Great Investment:
Individual cottages at apartment pricing with nearly 10% cap rate! This turnkey property offers immediate cash flow with clear value-add through RUBS implementation and rent optimization. At $103K/unit for detached cottages, this delivers institutional returns at a fraction of replacement cost while offering seller financing options to boost returns further.
The 9.37% cap rate is exceptional for California, and the RUBS implementation provides immediate upside.
Current Performance đź“ť
Investment Metrics (25% Down) | |
|---|---|
Purchase Price | $1,350,000 |
Down Payment | $337,500 |
Purchase Costs | $40,500 |
Total Cash Required | $378,000 |
Current NOI | $126,442/year |
Current Cash Flow | $43,534/year |
Current Cash-on-Cash | 12.9% |
RUBS Implementation Strategy 🚀
Immediate Value-Add Through RUBS | |
|---|---|
Current Gross Income | $204,340/year |
RUBS Additional Income | $14,271/year |
New Gross Income | $218,611/year |
Same Operating Expenses | $77,898/year |
New NOI | $140,713/year |
New Cap Rate | 10.4% |
Post-RUBS Performance | |
|---|---|
New Monthly Cash Flow | $5,826 |
New Annual Cash Flow | $69,915 |
New Cash-on-Cash | 18.5% |
Seller Financing Advantage đź’°
Seller Financing Option | |
|---|---|
Down Payment (20%) | $270,000 |
Seller Carries | $1,080,000 |
Interest Rate | 6.0% (below market) |
Monthly Payment | $6,479 |
Monthly Cash Flow | $4,058 |
Cash-on-Cash with RUBS | 24.3% |
Market Advantages:
9.37% cap rate exceptional for California
Individual cottages command premium rents
Small-town charm with Sacramento access
Limited supply drives strong demand
Kansas City BRRRR - HISTORIC NORTHEAST CASH FLOW MACHINE
đź“Ť Address: 3505 Garner Ave, Kansas City, MO 64124
đź’° Price: $110,000
🏠Property: 4BR/2BA, 1,796 SF Victorian
🏦 ARV: $210,000 | Rent: $1,650/month | Capital Recovery: 65.7%
Why This is a Great Investment:
At $61/SF with $100K in forced appreciation potential, this Historic Northeast property offers the perfect BRRRR formula. The recently renovated interior needs only cosmetic touches to achieve full ARV, making this a low-risk, high-reward investment with significant capital recovery.
This deal creates massive wealth with minimal capital trapped long-term.
BRRRR Analysis đź“ť
Initial Investment (Hard Money) | |
|---|---|
Purchase Price | $110,000 |
Down Payment (10%) | $11,000 |
Renovation Budget | $28,000 |
Holding Costs (4 months) | $5,448 |
Total Cash Required | $46,428 |
Refinance Strategy 🚀
Cash-Out Refinance (75% LTV) | |
|---|---|
ARV | $210,000 |
New Loan Amount | $157,500 |
Pay Off Hard Money | $99,000 |
Pay Back Renovation | $28,000 |
Cash Back to Investor | $30,500 |
Final Position | |
|---|---|
Total Cash Invested | $46,428 |
Cash Recovered | $30,500 |
Cash Left in Deal | $15,928 |
Capital Recovery Rate | 65.7% |
Cash Flow Analysis Post-Refinance đź’°
Monthly Cash Flow | |
|---|---|
Monthly Rent | $1,650 |
Mortgage Payment (6.8%) | $1,066 |
Taxes | $200 |
Insurance | $150 |
Management | $132 |
Maintenance/Vacancy | $183 |
Net Cash Flow | -$81 |
Optimization Strategies | |
|---|---|
Section 8 Rent | $1,850-1,950 |
Optimized Cash Flow | $84-184/month |
Annual Positive Flow | $1,008-2,208 |
Wealth Building Analysis:
Forced appreciation: $100,000 (immediate)
5-year appreciation: $35,000
Mortgage paydown: $22,000
Total wealth created: $157,000 on $15,928 invested
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