AI Insight
Opportunity
The property’s 7.97% cap rate and estimated 12.58% cash-on-cash return provide strong current yields, with significant upside through value-add renovations that could increase NOI by 15–20% and drive substantial equity appreciation.
AI Insight
Risk
Aging infrastructure (built in 1915) may require capital expenditures, and market volatility in Oakland poses risks, but these can be mitigated through thorough inspections, phased renovations, and adaptive leasing strategies.
AI Insight
Strength
Located in a high-demand Oakland zip code with R4 zoning, the asset benefits from urban accessibility, stable occupancy, and long-term appreciation potential due to market trends and densification options.
$2,299,999
Investment Value
7.97%
CAP Rate
📈
Strong 7.97% cap rate vs market average.
$183,323
Annual NOI
💰
High NOI demonstrates strong operational efficiency.
6,104 SF
Rentable Area
🏢
Optimal size for institutional investors.
0.0%
Occupancy Rate
✅
Exceptional occupancy exceeding market.
$376.80
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 thesis for this property?
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The core investment thesis centers on a high-cash-flow value-add opportunity in Oakland's resilient multifamily market. This six-unit Class C apartment building, built in 1915, offers a strong in-place cap rate of 7.97%, providing immediate cash flow. With a price per unit of $383,333—below the Oakland average—and R4 zoning that supports density, the property presents significant upside through strategic renovations. Investors can target appreciation by upgrading units to increase rental income, leveraging Oakland's urban revitalization and rental demand growth. It's ideal for those seeking both current yield and long-term equity build-up in a high-demand location.
What are the key financial metrics and projected returns?
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Key financial metrics include a purchase price of $2,299,999, a cap rate of 7.97%, and a price per square foot of $376.80. Based on standard assumptions (25% down payment, 5% interest rate), the estimated annual Net Operating Income (NOI) is $183,323, leading to a projected cash-on-cash return of 12.58%. The Gross Rent Multiplier (GRM) is estimated at 12.78, assuming average rents of $2,500 per unit per month. These metrics indicate strong cash flow potential and market competitiveness, with room for improvement through value-add initiatives that could boost NOI and returns further.
How does the location impact the investment's potential?
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Located at 5476 Vicente Way in Oakland's 94609 zip code, the property benefits from proximity to major employment hubs (e.g., downtown Oakland, San Francisco), transportation corridors like I-580, and local amenities. This urban setting drives consistent rental demand and supports rent growth, with Oakland's ongoing revitalization enhancing long-term appreciation. The R4 zoning allows for higher density, adding strategic optionality for future development. The area's strong job market and limited housing supply make it a stable market for multifamily investments, reducing vacancy risks.
What are the primary risks, and how can they be mitigated?
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Primary risks include aging infrastructure (built in 1915), which may require capital expenditures for maintenance; market volatility due to economic cycles or rent control policies in Oakland; and operating expense uncertainty without exact historical data. Mitigation strategies involve conducting a thorough property inspection to budget for phased renovations, diversifying with long-term leases and staying informed on local regulations, and using a conservative 40% operating expense ratio as a baseline while implementing cost-control measures. Tenant turnover in Class C properties can be managed through responsive management and incremental upgrades to improve retention.
What specific value-add opportunities exist?
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Value-add opportunities include renovating unit interiors (e.g., kitchen and bathroom upgrades) to increase rents from an estimated $2,500 to $2,800–$3,000 per month, improving common areas, and adding energy-efficient systems to reduce operating expenses. The Class C rating offers upside to elevate the property to Class B, potentially boosting NOI by 15–20%. Additionally, optimizing the parking (8 estimated spaces) for additional revenue, implementing proptech for operational efficiency, and leveraging R4 zoning for potential densification are strategic avenues. A phased renovation plan over 2–3 years can maximize returns while minimizing tenant disruption.
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