AI Insight
Opportunity
The sale price of $4,895,000 and price per unit of $326,333 are within the typical range for central San Francisco multifamily properties, but the calculated price per square foot of $595.14 suggests a premium valuation. Investors should verify rental income potential against this basis to ensure target returns (e.g., a 4–5% cap rate, assuming market NOI benchmarks). Without NOI data, modeling conservative pro forma cash flows is critical to assess feasibility.
AI Insight
Opportunity
Given the missing details on renovations and amenities, there is likely upside through targeted capital improvements. Upgrading units, adding amenities (e.g., rooftop spaces, smart home features), or improving energy efficiency could boost rents and NOI, potentially increasing property value by 10–20% over a 3–5 year hold period.
AI Insight
Risk
The absence of key financial data (NOI, cap rate) and property condition information necessitates rigorous due diligence. Investors should conduct a physical inspection, review historical income/expenses, and analyze local rent comparables to validate assumptions. Additionally, assessing San Francisco’s regulatory environment (e.g., rent control implications) is essential to avoid unforeseen liabilities.
AI Insight
Strength
The 94103 zip code is a high-demand urban corridor with access to employment centers, public transit, and amenities, reducing tenant turnover risk and supporting rental premiums. This location advantage enhances the property’s long-term appreciation potential and marketability, making it suitable for investors seeking exposure to San Francisco’s core multifamily market.
AI Insight
Strength
This property represents a central market entry point in a supply-constrained city, ideal for investors with a medium- to long-term horizon. While upfront pricing is premium, San Francisco’s historical resilience suggests that well-located multifamily assets like this can weather economic cycles and deliver solid returns through rental growth and capital appreciation, especially if acquired before anticipated market upswings.
$4,895,000
Investment Value
0.00%
CAP Rate
📈
Strong 0.00% cap rate vs market average.
$0
Annual NOI
💰
High NOI demonstrates strong operational efficiency.
8,225 SF
Rentable Area
🏢
Optimal size for institutional investors.
0.0%
Occupancy Rate
✅
Exceptional occupancy exceeding market.
$595.14
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 acquiring a scalable, 15-unit multifamily asset in the heart of San Francisco's high-demand 94103 zip code. This mid-rise building offers a strategic entry point into one of the nation's most resilient and supply-constrained urban markets. The investment leverages San Francisco's robust tech-driven economy, enduring housing shortage, and strong demographic tailwinds supporting rental demand. With a price per unit of approximately $326,333 and a calculated price per square foot of $595.14, the property presents an opportunity to capitalize on long-term appreciation and rental growth, diversified across multiple income streams. The value proposition is further enhanced by the potential for operational efficiencies and value-add upgrades to increase net operating income (NOI) over a medium- to long-term hold period.
What are the key financial metrics and how do they compare to the market?
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The property is listed at a sale price of $4,895,000, equating to $326,333 per unit and $595.14 per square foot. Specific financial metrics such as the Net Operating Income (NOI) and Capitalization Rate (Cap Rate) are not provided in the available data and require further due diligence. Based on the calculated price per square foot, the valuation aligns with premium multifamily benchmarks in central San Francisco. Investors should conduct a thorough pro forma analysis using current market rental comparables and expense ratios to estimate a realistic NOI. In the San Francisco multifamily market, cap rates typically range from 3.5% to 5% for well-located assets, suggesting a target NOI in the range of $171,325 to $244,750 would be needed to align with this pricing. Verification of income, expenses, and local rent control regulations is essential for accurate underwriting.
How does the location and submarket (94103) impact the investment's strength and risk?
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The location at 1532 Howard St in the 94103 zip code is a primary strength. This area is part of San Francisco's vibrant urban core, characterized by proximity to major employment centers (including tech hubs), cultural amenities, dining, retail, and public transit options. This dynamic submarket supports high occupancy rates, attracts a stable tenant base of urban professionals, and commands rental premiums. The high barriers to new construction in San Francisco protect long-term value. However, the location also introduces specific risks, including exposure to potential market volatility linked to the tech sector, stringent local regulations (e.g., rent control ordinances), and competitive pressures from newer developments. Investors must weigh the submarket's strong demand fundamentals against these regulatory and economic cyclicality risks.
What are the primary risks associated with this investment?
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The primary risks include: Financial Data Gaps: The absence of confirmed NOI, cap rate, tax rate, and historical operating statements necessitates extensive due diligence to validate income and expense projections. Property Condition Unknowns: Lack of information on the year built, renovation history, and structural condition could indicate significant deferred maintenance or imminent capital expenditures, impacting cash flow. Market and Regulatory Risks: San Francisco's real estate market is influenced by economic cycles, particularly in the tech sector. Additionally, local rent control and eviction regulations can limit rental growth and operational flexibility. Pricing and Cash Flow Risk: The premium price per unit and per square foot may pressure initial cash flow if achievable rents do not meet pro forma expectations, requiring careful rent benchmarking and conservative underwriting.
What value-add opportunities exist to enhance the property's income and value?
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Several value-add opportunities are apparent, given the lack of detailed information on amenities and renovation status: Unit Upgrades: Modernizing interiors (e.g., kitchens, bathrooms, flooring) and installing energy-efficient appliances can justify rental increases and reduce tenant turnover. Amenity Creation: Adding desirable amenities such as a rooftop deck, co-working space, fitness area, or enhanced security features could differentiate the property and support premium rents. Operational Efficiency: Implementing cost-saving measures like water-saving fixtures, LED lighting, or smart building technology can reduce operating expenses and improve NOI. Common Area Improvements: Upgrading lobbies, hallways, and exterior spaces can enhance curb appeal and overall tenant satisfaction. Executing a targeted capital improvement plan could potentially boost NOI by 10-20%, significantly increasing the property's value upon a future sale, especially in a market that rewards upgraded, modern living spaces.
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