1324 Vallejo St, San Francisco, CA 94109 — 13.1% Cash-on-Cash

About this property

1324 Vallejo St is a 2-bedroom, 1-bath single-family unit in San Francisco's 94109 ZIP, listed at $650,000 with 835 square feet of living area on a 2,361-square-foot lot.

The listing describes this as the top floor of a fully detached structure, separated from an adjacent identical unit at 1326 Vallejo by a single shared wall — both are currently on the market as a combined or individual sale. That context matters: the seller is offering 100% financing on 1324 specifically, which expands the buyer pool beyond conventional borrowers.

Inside, the unit retains period details — coved ceilings, decorative fireplaces, and original crown moldings — alongside a recently renovated bathroom. Each unit has a large dining-kitchen with a back door leading to either the roof or a garage-basement with two parking spaces and storage, which is a meaningful amenity in a dense urban ZIP code where parking commands a premium.

The property has been on the market for one day with no price reduction from the original listing. At 835 square feet, it's compact, but the walk score of 99 and transit score of 93 cited in the listing signal strong rental appeal for tenants who prioritize access over square footage. Figures exclude depreciation tax benefits, which vary by individual tax situation.

The investment case

A 13.1% cash-on-cash return at a $650,000 list price puts this property in a different category from nearly every other active listing in San Francisco — the city's average cash-on-cash sits at negative 11.0%.

List Price

$650,000

Monthly Payment (PITI+HOA)

$4,339

Principal & Interest

$3,202

Property Tax

$634

Insurance

$217

HOA

$286

PMI

$0

Est. Monthly Rent

$5,755

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

13.1%

Cap Rate

9.7%

Monthly Cash Flow

$1,416

Gross Rent Multiplier

9.4

DSCR

1.6

The numbers behind that gap: estimated monthly rent of $5,755 against a total monthly payment of $4,339, producing $1,416 in monthly cash flow. The payment stack includes $3,202 in principal and interest at a 6.49% 30-year fixed rate, $634 in property taxes, $217 in insurance, and $286 in HOA fees. No PMI applies, consistent with a 20% down payment assumption.

The cap rate of 9.7% and net operating income of $5,252 per month are the figures that stand out most to income-focused buyers. A 9.7% cap rate in San Francisco is structurally unusual — the city median listing price is $998,000, and most properties at that price point don't generate anywhere near this NOI relative to value.

The gross rent multiplier of 9.4 reinforces the picture. Lower GRM means fewer years of gross rent needed to recover the purchase price, and 9.4 is well below what you'd typically see on a San Francisco asset. The debt service coverage ratio of 1.6 means the property generates $1.60 in NOI for every $1.00 of debt service — a comfortable cushion that most lenders would view favorably for a refinance or portfolio loan.

The tenth-best cash-on-cash deal in San Francisco currently sits at 7.06%, meaning this property's 13.1% places it comfortably inside the city's top tier. That's not a minor distinction in a market where the average deal destroys cash flow on day one.

Annual return outlook

The projected 19.5% five-year total ROI draws from three sources, with cash flow doing the heaviest lifting by a wide margin.

Cash flow contributes 13.1 percentage points of that 19.5% total — the dominant driver. Mortgage paydown adds 3.6 points as principal amortizes over the hold period. Appreciation contributes an estimated 2.8 points annually, though that figure is an estimate rather than a data-derived market measurement, so it carries more uncertainty than the cash flow and paydown components.

The appreciation estimate of approximately 2.8% annually is a reasonable baseline for a high-demand San Francisco ZIP, but investors should treat it as a floor assumption rather than a target. The cash flow and paydown components, by contrast, are mechanically derived from the current rent estimate and loan terms — they don't depend on market conditions improving.

What that means practically: even if appreciation comes in flat over five years, the cash flow and paydown components alone project a 16.7% return. That's a meaningful margin of safety in a city where most investment theses rely almost entirely on price appreciation to generate any return at all.

The 5-year case here is unusually cash-flow-led for San Francisco — appreciation is upside, not the load-bearing wall.

How it compares to nearby for-sale listings

Five active for-sale listings in ZIP 94109 provide pricing context, with a comp median of $1,195,000 — 84% above this property's $650,000 ask.

At $650,000 for 835 square feet, this property prices at roughly $778 per square foot. The adjacent 1326 Vallejo — the identical unit next door — lists at $599,000 for the same footprint, implying the seller is pricing 1324 at a modest premium, possibly reflecting the newer bathroom or the seller financing terms attached to 1324 specifically.

The next closest comparable by size is 1252 Pacific Ave at $688,000 for 835 square feet — nearly the same price-per-foot. Beyond those two, the comp set diverges sharply: 1789 Washington at $1,595,000, 1200 Gough at $1,195,000, and 1176 Pine at $1,985,000 are all larger, better-finished, or in higher-demand micro-locations within the ZIP. They're less useful as direct valuation benchmarks and more useful as a reminder of where the ZIP's price ceiling sits.

The fact that 1324 and 1326 Vallejo are both fresh to market — one day each — with no price reductions suggests the seller is testing demand rather than capitulating. The combined-sale structure creates an unusual dynamic: a buyer who wants both units gets a 4-bedroom, 2-bath top-floor flat with two garage spaces at a blended ask of $1,249,000, which is actually below the comp median of $1,195,000 on a per-unit basis.

Rental demand in this zip

The rent estimate for this property is $5,755 per month, though no directly comparable rental listings were identified in ZIP 94109 with two bedrooms to validate that figure.

The absence of rental comps in the data set is a real limitation. It doesn't mean $5,755 is wrong — San Francisco's 94109 ZIP is a high-rent corridor, and two-bedroom units in well-located buildings routinely achieve rents in that range. It does mean the cash flow projection rests on a single estimate rather than a bracketed range from multiple active comparables.

Investors underwriting this deal should independently pull current rental listings in the immediate area before closing. If achievable rent comes in 10% below the estimate — around $5,180 — monthly cash flow drops from $1,416 to roughly $841, and cash-on-cash falls from 13.1% to approximately 7.8%. That's still well above the city average, but the sensitivity is worth knowing.

The property's walk score of 99 and transit score of 93 are structural supports for rent demand. Tenants who prioritize walkability and transit access — a large share of the San Francisco renter pool — will pay a premium for those attributes. The two included garage spaces are an additional lever; parking in this ZIP can be rented separately or bundled into the lease at above-market rates.

The rent estimate is plausible for the location, but the lack of active comp data means conservative underwriting should stress-test it at 90% of the stated figure.

Who this property suits + risks to weigh

This property fits a cash-flow-oriented buyer who wants San Francisco exposure without the negative-carry structure that defines most city deals.

Best fit

The investor profile here is someone comfortable with a smaller, older unit in exchange for genuine income production. The 13.1% cash-on-cash and 1.6 DSCR make this a strong candidate for a buy-and-hold landlord who wants the property to service its own debt from day one. The seller financing option on 1324 specifically — mentioned in the listing — could appeal to buyers who want to preserve capital or avoid conventional underwriting constraints.

The combined-sale structure with 1326 Vallejo also creates an option for a buyer who wants to scale: acquiring both units doubles the income stream, consolidates management under one roof, and produces a 4-bedroom asset at a price point still below the ZIP's comp median.

Risks to weigh

The HOA fee of $286 per month is a fixed cost that doesn't flex with vacancy. If the unit sits empty for a month, the investor absorbs the full $4,339 payment stack with no rental offset. At 835 square feet with one bathroom, the property has limited appeal to tenants with families or roommate arrangements — the tenant pool skews toward singles or couples, which is a narrower market than a two-bath unit would attract.

The rent estimate lacks rental comp support, which introduces more projection uncertainty than a deal with five active comps would carry. And while the 9.7% cap rate is compelling, it depends on maintaining the current rent estimate — any softening in the San Francisco rental market compresses that figure faster than it would on a lower-priced asset.