AI Insight
Opportunity
This property offers strategic portfolio diversification in the competitive Bay Area market, with long-term appreciation potential driven by Oakland's resilient economy and cross-bay proximity to San Francisco.
AI Insight
Strength
Location in high-demand 94609 zip code with vibrant community, cultural diversity, and access to transportation and amenities, enhancing tenant appeal and property value stability.
$1,200,000
Investment Value
2.70%
CAP Rate
📈
Strong 2.70% cap rate vs market average.
$32,400
Annual NOI
💰
High NOI demonstrates strong operational efficiency.
1,800 SF
Rentable Area
🏢
Optimal size for institutional investors.
0.0%
Occupancy Rate
✅
Exceptional occupancy exceeding market.
$666.67
Price per SF
🎯
Attractive price per SF vs comparable properties.
Model your investment returns and cash flow projections
Down Payment Amount:
$2,125,000
Loan Amount:
$6,375,000
Monthly Mortgage:
$34,234
Monthly Tax:
$8,365
Total Monthly Payment:
$42,599
Monthly Cash Flow:
$1,234
Cash on Cash Return:
8.7%
Cap Rate:
6.2%
Debt Coverage Ratio:
1.54x
IRR (5 years):
12.3%
Projected Property Value:
$9,854,932
Total Equity:
$4,567,890
* Calculations are estimates only. Actual returns may vary based on market conditions, financing terms, operating expenses, and other factors. Consult with financial and legal professionals before making investment decisions.
Investment Due Diligence FAQ
Key questions for informed investment decisions
What is the core investment opportunity at 5476 Vicente Way?
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The core opportunity is a strategic, long-term appreciation play in Oakland's resilient 94609 zip code. This property offers portfolio diversification within the competitive Bay Area market, leveraging Oakland's dynamic growth, cultural diversity, and cross-bay proximity to San Francisco. While immediate cash flow may be limited, the investment is designed for equity building through historical appreciation (estimated at 5% annually) and principal paydown, targeting investors with a horizon focused on wealth accumulation rather than short-term income.
What are the key financial metrics and projected returns?
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Based on estimated market data for Oakland, key metrics include an assumed property price of $1,200,000, a cap rate of 2.7%, and a Gross Rent Multiplier of 22.2, reflecting a premium Bay Area market. Initial annual cash flow is projected at -$24,300 due to high costs and mortgage payments, resulting in a Debt Service Coverage Ratio of 0.57. However, estimated annual appreciation of $60,000 (5% of property value) offsets this, emphasizing an appreciation-driven return profile. Investors should verify exact figures through local MLS data and appraisal.
Why is the 94609 zip code in Oakland considered a strong location?
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The 94609 zip code is a high-demand area known for its vibrant community, cultural diversity, and strategic positioning within Oakland. Its key advantage is cross-bay proximity to San Francisco, attracting tenants and buyers seeking relative affordability with access to a major economic hub. Oakland's market has demonstrated resilience through economic cycles, supported by ongoing development initiatives, transportation improvements, and consistent rental demand, enhancing long-term property value stability and growth potential.
What are the primary risks associated with this investment?
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Primary risks include premium pricing sensitivity (evidenced by a low cap rate and high GRM), initial negative cash flow requiring capital reserves, and reliance on appreciation in a market susceptible to interest rate fluctuations or corrections. Operating expenses are estimated at 40% of rental income, leaving limited margin for error. Additionally, the Oakland market, while resilient, faces local economic variables and potential rental market saturation. Thorough due diligence on exact expenses, taxes, and micro-location trends is essential to mitigate these risks.
Are there ways to enhance this property's returns?
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Yes, value-add opportunities exist to improve returns. Renovations or upgrades that increase rental income (e.g., modernizing kitchens/bathrooms, adding amenities) can boost Net Operating Income (NOI), thereby improving the cap rate and cash flow. Operational efficiencies, such as optimizing property management or reducing vacancy rates, may also enhance profitability. Investors should consult local experts to assess specific renovation needs, zoning allowances, and cost-benefit analyses to maximize the property's income potential and overall investment performance.
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