1326 Vallejo St, San Francisco, CA 94109 — 12.2% Cash-on-Cash

About this property

1326 Vallejo St is a 2-bedroom, 1-bath single-family unit in San Francisco's 94109 ZIP, offered at $599,000 and listed just one day ago.

The listing describes an entire top-floor unit, fully detached on all sides, with partial city views — a configuration that tends to command a rent premium over interior or ground-floor units. High ceilings with coved detailing, original crown moldings, and decorative fireplaces give the space period character that's difficult to replicate in newer construction. A large dining-room kitchen with a back door leading to the roof or down to a garage basement adds functional flexibility uncommon at this price point.

The unit sits on a 2,361-square-foot lot and measures 835 square feet of living area. Critically, the listing is structured as a combined sale with the adjacent 1324 Vallejo St — two identical top-floor units separated by one wall. The $599,000 price covers 1326 alone; 1324 is offered separately with seller financing. That structure gives a buyer the option to control both units or acquire just one. A 3-year home warranty is included. The property is non-owner-occupied, meaning it's already positioned as an income asset, not a primary residence being converted.

The investment case

A 12.2% cash-on-cash return at a $599,000 list price is the headline, but the full picture — cap rate, debt service coverage, and monthly cash flow — holds up under scrutiny.

List Price

$599,000

Monthly Payment (PITI+HOA)

$4,021

Principal & Interest

$2,951

Property Tax

$584

Insurance

$200

HOA

$286

PMI

$0

Est. Monthly Rent

$5,242

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

12.2%

Cap Rate

9.5%

Monthly Cash Flow

$1,221

Gross Rent Multiplier

9.5

DSCR

1.6

San Francisco's city-average cash-on-cash sits at -11.0%. The tenth-best deal on the city's top-10 leaderboard clears 7.06%. At 12.2%, this property doesn't just beat the city average — it clears the leaderboard's weakest entry by more than five percentage points. That's a meaningful gap in a market where positive cash flow is genuinely rare.

The numbers behind that figure: estimated monthly rent of $5,242 against a total monthly payment of $4,021, producing $1,221 in monthly cash flow. The payment stack includes $2,951 in principal and interest at the current 30-year fixed rate of 6.49%, $584 in property tax, $200 in insurance, and $286 in HOA fees. No PMI is factored in, consistent with a 20% down payment assumption.

The cap rate of 9.5% and net operating income of $4,756 per month suggest the property generates strong returns even before financing is layered in. A debt service coverage ratio of 1.6 means rent covers the mortgage payment by a wide margin — lenders typically want 1.2 or above, so there's cushion here. The gross rent multiplier of 9.5 is low relative to most San Francisco assets, where GRMs routinely run 20 or higher. Figures exclude depreciation tax benefits, which vary by individual tax situation.

By every standard income metric, this property is an outlier in its city context.

Annual return outlook

The 18.6% total 5-year ROI draws from three sources, with cash flow doing the heaviest lifting.

Cash flow contributes 12.2 percentage points of the 18.6% total — by far the dominant component. Mortgage paydown adds 3.6 points, a mechanical return that accrues regardless of market conditions. Appreciation rounds out the picture at an estimated 2.8 points annually, though that figure is an estimate rather than a market-observed rate, and should be treated as a soft assumption rather than a hard projection.

The structure matters. In most San Francisco deals, appreciation is the entire investment thesis because cash flow is negative. Here, an investor could underwrite the deal assuming zero appreciation and still clear a positive return. The appreciation upside is real but additive, not load-bearing. That's a fundamentally different risk profile from the typical SF acquisition.

At a $599,000 entry price — roughly 40% below the city's median listing price of $998,000 — the property also has more room to benefit from mean reversion if the market strengthens. The combined-unit structure with 1324 Vallejo creates an optionality layer: a buyer who later acquires the adjacent unit could reposition the asset as a larger combined residence or multi-unit income property.

How it compares to nearby for-sale listings

Five active 2-bedroom listings in 94109 provide pricing context, and the spread is wide.

At $599,000, this property prices at $717 per square foot. The adjacent 1324 Vallejo — identical in size and configuration — lists at $650,000, or $778 per square foot. The next closest comparable, 1252 Pacific Ave at $688,000 and also 835 square feet, runs $824 per square foot. Both of those are priced above 1326 Vallejo on a per-square-foot basis despite being structurally similar.

The comp set's median lands at $1,195,000, driven by larger units at 1200 Gough ($1,195,000 at 1,500 sqft) and 1176 Pine ($1,985,000 at 3,055 sqft). Those properties aren't direct comparables in size or configuration, but they anchor the upper end of what buyers are paying in this ZIP for 2-bedroom product. Against that median, 1326 Vallejo is priced at roughly half the ZIP's 2-bedroom midpoint.

One day on market is too early to read as a signal, but the two most similar comps — 1324 and 1252 Pacific — are also fresh listings, suggesting a cluster of similar inventory hitting simultaneously. That's worth watching: if the adjacent 1324 sells quickly, it validates the price; if it lingers, it may signal buyer hesitation at the combined-sale structure.

Rental demand in this zip

No active rental comps were identified in ZIP 94109 for 2-bedroom units, which limits direct market validation of the rent estimate.

Estimated monthly rent for this property is $5,242. With zero comparable rentals captured in the 94109 dataset, that figure can't be benchmarked against active market listings in the same ZIP. That's a real data gap, and investors should treat the rent estimate as a starting point rather than a confirmed market rate.

Context helps partially. The property is a top-floor unit with partial city views, period details, and a walk score of 99 with a transit score of 93 per the listing. Those attributes — walkability, transit access, architectural character — are among the factors that support premium rents in urban San Francisco markets. Whether the market currently clears $5,242 for an 835-square-foot 2-bedroom in this specific location requires independent verification before underwriting.

The cash flow math is sensitive to rent assumptions. At $5,242, monthly cash flow is $1,221. A 10% rent reduction to $4,718 would cut cash flow to roughly $697 per month and compress the cash-on-cash return meaningfully. The deal doesn't collapse at that scenario, but the margin of safety narrows. Investors should run their own rental comps before closing.

Who this property suits + risks to weigh

This property suits an income-focused buyer comfortable with San Francisco's regulatory environment and willing to verify rent assumptions independently.

Best fit

The deal's cash-on-cash profile — 12.2% in a city where the average is -11.0% — makes it most relevant to investors who've been priced out of SF income plays and assumed the market doesn't support them. At $599,000 with a 20% down payment, the entry cost is roughly $120,000 plus closing costs, which is low for San Francisco. The combined-unit structure with 1324 Vallejo creates a natural expansion path: a buyer who acquires both units controls the entire top floor and could realize economies of scale on management and maintenance.

Risks to weigh

The rent estimate lacks local comp support. Zero comparable rentals in the dataset means the $5,242 figure is unverified against current market activity. That's the single largest underwriting risk in this deal. San Francisco also carries tenant-protection regulations that can complicate vacancy and rent adjustment; the property is currently non-owner-occupied, which means it's likely already subject to those rules.

The HOA fee of $286 per month is a fixed cost that doesn't scale with rent and will compress returns if the building has deferred maintenance or upcoming special assessments. The listing doesn't disclose HOA financials. The combined-sale structure with 1324 adds complexity — a buyer acquiring only 1326 shares a wall with a separately owned unit, which may affect noise, management, and eventual resale.

Strong on paper, but rent verification and HOA due diligence are non-negotiable before committing.