Dealsletter Deal Run — May 29, 2026

Run type: Fresh batch — 4 new multifamily + 1 San Diego house hack
Excluded (prior run): 5401 E 27th Ter KCMO | 1014 W 57th St LA | 3250-3262 Bozeman St Sacramento | 1040 Gillespie Dr Spring Valley
Underwriting assumption: DSCR loan — 6.5% annual rate, 25% down, 30-year amortization
San Diego house hack: FHA 3.5% + 5% conventional + 20% conventional scenarios
As of: May 29, 2026

Ranking Summary

Data confidence: Deal 1 HIGH (full financials, GRM, rent roll on LoopNet). Deal 2 HIGH (stated NOI from listing). Deal 3 MEDIUM (stated cap, confirmed rent roll, distress flag). House Hack HIGH (gross income stated, FHA limits verified).

Deal 1 — Wheatley Court Apartments ⭐ Top Pick (Value-Add)

Address: 5408 Market St, Houston, TX 77020
Source: LoopNet Listing #40444206
Date on Market: May 7, 2026 (22 days old)
Property Type: 32-unit apartment, Class C garden-style, 2-story
Year Built/Renovated: 1955 / 2024 (fully renovated)
Building Size: 34,896 SF | Lot: 0.52 AC
Opportunity Zone: Yes
Occupancy: 100%

Financials

Note on stated 10.77% cap: The listing advertises 10.77% cap with GRM of 6.69. Cross-checking: 32 units × $900 × 12 = $345,600 gross. GRM of 6.69 implies gross income of $523K — significantly higher than in-place. The 10.77% cap is a proforma figure using projected market rents, not current $900/unit in-place. In-place NOI at conservative 40% expenses = $192,845, yielding a true in-place cap of ~5.5%. The value-add thesis rests on raising rents toward market — East End Houston 2BR averages $1,350–$1,605, a 50–78% premium over in-place.

DSCR Loan Underwriting

Deal Flags

• In-place rents are 33% below market — this is a true value-add deal, not a stabilized buy-and-hold. DSCR lenders will likely stress-test at in-place (0.97x fails). Negotiate a bridge or portfolio loan at year 1 then refi once rents are raised, or bring in a DSCR lender who underwrites on market rents with rent proforma support.
• $500K+ in documented capital improvements since March 2023; all units 2BR/1BA fully renovated.
• In-place Fannie Mae loan potentially assumable — if rate is below 6.5%, this could materially improve day-one cash flow. Confirm with broker.
• Opportunity Zone — federal tax benefits on capital gains if held.
• Location risk: 77020 zip is East End, 3.5 mi from Downtown, adjacent to EaDo and East River development. Value-add is real but neighborhood is Class C; management intensity will be high.
• Best use: Experienced operator or Dealsletter power user with bridge loan access. Not a passive DSCR hold at current rents.

Deal 2 — 921 Rivera Dr, Sacramento CA ⭐ Best Entry Price

Address: 921 Rivera Dr, Sacramento, CA 95838
Source: LoopNet Listing #40011347
Date on Market: April 2, 2026 (57 days old)
Property Type: 4-unit, 3 buildings on 0.46 AC lot, Class C
Year Built: 1948 | Building Size: 3,665 SF
Occupancy: 100% | Opportunity Zone: Yes
Sale Conditions: Distress Sale / Deferred Maintenance

Unit Mix & Rent Roll

Listing states "over $76,000 annual rent revenue" — confirmed by rent roll.

DSCR Loan Underwriting

Deal Flags

• Stated 9.90% cap is aggressive — it uses simple gross income without vacancy, management, taxes, or maintenance. Conservative underwriting yields ~5.75% ongoing. The gap is the reality of a 1948 building with deferred maintenance.
• The price point is exceptional for Sacramento — $197K/unit in a CA market where new construction is $400K+/unit is genuine value if you can stomach the capex upfront.
• ADU plans approved — approved plans for an additional ADU on the 0.46 AC lot. If built, adds ~$1,200–$1,500/mo in rental income, materially improving the NOI and DSCR.
• Rent upside — $1,295/mo for 1BR/2BR units in Sacramento (95838, near Hwy 80) is below market. Sacramento 1BR averages $1,400+. Stabilizing rents + ADU could push NOI to $60,000+.
• Deferred maintenance discount — "distress sale" tag typically means room to negotiate on price. Push for $720K–$750K range and the economics change meaningfully.
• Best use: Value-add buyer with $230K cash + $15–25K renovation budget. Not a pure passive hold; requires hands-on management in Year 1.

Deal 3 — Residences at Fairmount, Phoenix AZ (Stabilized / Low Risk)

Address: 1017–1031 E Fairmount Ave, Phoenix, AZ 85014
Source: LoopNet Listing #39854768
Date on Market: March 20, 2026 (70 days old)
Property Type: 8-unit apartment, Class C low-rise, 1-story
Year Built: 1966 | Building Size: 6,559 SF | Lot: 0.15 AC
Occupancy: 100% (fully stabilized)
Zone: R-3 (multifamily zoning)

Unit Mix

Individual rents not disclosed in listing. Avg rent estimated at ~$1,580/unit/mo based on 45% expense ratio against stated NOI. Midtown Phoenix 2BR market runs $1,400–$1,800.

DSCR Loan Underwriting

Deal Flags

• DSCR is tight at 1.06x at 6.5% rate. Most DSCR lenders require 1.20–1.25x. This deal needs either: (a) seller rate buydown, (b) price reduction, or (c) a bridge/local bank loan. At 5.5% rate, DSCR improves to ~1.24x — negotiate a seller concession to buy down rate.
• Strongest stability story of the batch — fully occupied, 6/8 units renovated, low near-term capex, 3 garages + 4 carport spaces (revenue upside).
• Midtown Phoenix location is premium for Class C: walkable, near employment, strong rental demand. This is a "sleep well at night" asset — just barely doesn't pencil at current rate environment.
• Avg rent estimate is flagged — the implied ~$2,399/unit average seems high for Class C 1966-built in Midtown. Phoenix 2BR averages $1,200–$1,600 in this corridor. Request actual rent roll before going under contract. If rents are at market, NOI is correct. If rents are above market (pro forma), NOI is overstated.
• Best use: Buyer seeking stabilized income with minimal management. Ideal for 1031 exchange or first CRE acquisition where reliability > yield.

House Hack — 3560-64 Sydney Pl, San Diego CA 92116

Address: 3560-64 Sydney Pl, San Diego, CA 92116 (Normal Heights / Adams North)
Source: Zillow Listing SDMLS #260011934
Date on Market: May 16, 2026 (13 days old) — fresh listing
Property Type: 3-unit residential income (front SFR + 2 rear 2BR/1BA units)
Year Built: 1999 | Total SF: 2,326 SF | Lot: 0.52 AC
Listing Terms: Cash, Conventional, FHA, VA
MLS: SDMLS #260011934 | Listing Agent: Patrick Mercer, KW La Jolla, 619-846-2083

Property Description

Front unit is a charming single-family residence embracing canyon views — buyer occupies this. Two rear newer-construction (1999) 2BR/1BA units generate income. The listing explicitly targets the "live in the SFR while renting the two rear units" house-hack strategy and states gross rental income of $124,560/yr ($10,380/mo) when rear units are fully occupied.

FHA Loan Limit Analysis (San Diego County 2026)

Property price is $1,995,000 — exceeds the FHA 3-unit limit of $1,708,400. Standard FHA at 3.5% down is technically not available unless a lender confirms a classification workaround (the listing says "FHA accepted" — verify with broker if there is a 4th habitable structure on the 0.52 AC lot that could count). Best standard financing is conventional jumbo with 10–20% down.

Financing Scenarios

Net housing cost = PITI (P&I + taxes + insurance) minus rental income received. Does not include the value of "free" occupancy in front SFR unit.

House Hack Economics

House Hack Flags

• Price exceeds FHA 3-unit limit — confirm with listing agent whether the 0.52 AC lot has a 4th structure or if FHA acceptance is for a special program. If not, use conventional 5% jumbo-hybrid or 10% down.
• Strong rent coverage — $10,380/mo in rental income substantially offsets the mortgage. Owner effectively pays ~$3,900–$4,350/mo for a San Diego home (before accounting for owner's unit value).
• Fresh listing (13 days) — price has not been reduced; good negotiation window before competing offers.
• Canyon views, newer rear construction (1999) — units likely command premium rents in Normal Heights, which is one of San Diego's strongest demand neighborhoods (walk score, restaurants, proximity to Balboa Park/Downtown).
• Zoning R-1 — verify ADU potential for a third income stream. At SD's ADU-friendly policies, an additional unit on 0.52 AC could add $1,500–$2,000/mo.
• Investor note: This is a genuine house hack not a pure investment. From a pure investment standpoint, the property does not cash-flow after a PITI debt service, but the owner lives in a desirable SD neighborhood at a fraction of market rent while building equity.

Underwriting Comparison Matrix

Key Flags & Assumptions

All deals:

• DSCR loan: 6.5% annual interest, 25% down, 30-year amortization
• Closing costs estimated at 2.5% of purchase price
• Vacancy: 7% (standard assumption where not stated)
• Reserve fund: 5–8% of gross income annually

Deal 1 (Wheatley Court):

• ⚠️ In-place rents ($900) are 33% below East End Houston market ($1,350). DSCR at in-place rents = 0.97x — does not qualify for standard DSCR product. Requires bridge financing or a lender who underwrites on stabilized proforma.
• ✅ Market-rate stabilized DSCR = 1.45x — excellent once rents are raised.
• 📌 Verify Fannie Mae assumable loan rate before proceeding.
• Sources: LoopNet Listing | Houston rent market

Deal 2 (Sacramento):

• ⚠️ "Distress sale / deferred maintenance" listing tag. Budget $15,000–$25,000 upfront for Year 1 capex.
• ⚠️ Stated 9.90% cap uses simple gross without full expense load. Conservative underwriting yields 5.75%.
• ✅ ADU plans approved — upside path is real. Opp Zone eligible.
• ✅ Lowest price entry of the batch; highest dollar-for-dollar value per Sacramento standard.
• Sources: LoopNet Listing

Deal 3 (Phoenix):

• ⚠️ Avg rent estimate (~$2,399/unit) is flagged — unconfirmed in listing. Request rent roll. If actual rents are $1,600–$1,800, NOI is lower and DSCR falls further below 1.0.
• ⚠️ DSCR at 1.06x is below DSCR lender minimum (1.20x). Negotiate seller rate buydown or lower price.
• ✅ Fully occupied, 6/8 units renovated, genuine stabilized income play.
• Sources: LoopNet Listing

House Hack (San Diego):

• ⚠️ Price $1,995,000 exceeds FHA 3-unit limit of $1,708,400. FHA is listed as accepted — verify with broker.
• ✅ Conventional 5% down keeps cash entry to ~$150K.
• ✅ $10,380/mo rental income makes SD homeownership meaningfully more affordable.
• ✅ Freshest listing in this run (13 days old as of today).
• Sources: Zillow SDMLS #260011934 | SD FHA Limits 2026 | SD conforming limits | SD house hack context

All Source URLs

Dealsletter | Kevin Godbey | Run date: May 29, 2026