Prime Multi-family Building in San Francisco
Multifamily | 5 Units | $398,000/unit
Marketing description
Open house: Saturday 02/28/26 2:00pm - 4:00pm
This 5-unit property in the Laurel Heights neighborhood is a standout opportunity for investors seeking stable cash flow and long-term appreciation in one of San Francisco's most desirable areas. Recently repaired and painted exterior walls, updated and remodeled one of the units; while the other units have been updated since 2024, and repaired the foundation, the property is the gem of the city. With its prime location minutes from USF and UCSF campuses, the property taps into a perpetual rental demand from students, faculty, and healthcare professionals ensuring high occupancy rates that consistently outperform nearby neighborhoods like Outer Richmond and the Sunset District. Units here command premium rents due to unmatched walkability to Trader Joe's, Target, and the bustling dining/grocery corridors of Geary Boulevard and Clement Street, while proximity to MUNI transit (15 minutes to Downtown/Financial District) attracts tech professionals and commuters. Investors benefit from premium market rate rents and a location that drives rental premiums over comparable properties in less central areas. The neighborhood's top-rated schools (e.g., Peabody Elementary, Roosevelt Middle Schools) and proximity to Golden Gate Park add family-friendly appeal, broadening your tenant pool. With value-add potential (modernize kitchens, bathrooms, or add in-unit laundry) and San Francisco's historically resilient market, this asset offers both immediate income and future equity growth.
Investment highlights
✅ Immediate Value‑Add
- Lease vacant Unit 3 at $3,200/mo → NOI increases 43%, cap rate jumps from 4.24% to 6.04%.
- Low risk: the unit is ready to rent; market demand supports $3,200+.
✅ Strong Operating History
- NOI grew 64% from 2024 (51,240)to2025(51,240)to2025(84,266).
- Legal fees reduced by 73%; management expenses well controlled.
✅ Additional Upside Opportunities
- Unit 5 rents at 2,124–conservativerenovationcouldpushto2,124–conservativerenovationcouldpushto2,600–$2,800.
- Laundry income increased from 334(2024)to334(2024)to1,140 (2025); potential to add card-operated machines or increase prices.
- ADU potential – the backyard may accommodate a 400–600 sq ft unit, generating 2,000–2,000–3,000/month.
✅ Favorable Financing Environment
- 6.04% pro‑forma cap rate compares favorably to current debt costs (5.5–6.0% for multifamily), enabling positive leverage.
- Estimated cash‑on‑cash return (25% down, 5.5% interest, 30‑year amortization): ~8.2% at stabilization.
✅ Prime Submarket Fundamentals
- 94118 median rent: 3,700–3,700–3,900 (2025).
- Low vacancy: SF multifamily vacancy dropped to ~5% in 2025.
- High barriers to entry, limited new supply.
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