263 Friedell St, San Francisco, CA 94124 — 19.7% Cash-on-Cash

About this property

263 Friedell St is a 3-bedroom, 3-bathroom townhouse in San Francisco's 94124 ZIP, listed at $428,441 — well below the city's median listing price of $998,000.

The property is a Below Market Rate (BMR) unit offered through the Mayor's Office of Housing and Community Development, targeting buyers at 80% of Area Median Income. That program context is critical: the listing price is set administratively, not by open-market bidding, which explains the sharp discount to comparable for-sale inventory in the same ZIP.

Eligibility is restricted to first-time homebuyers who meet income thresholds — $112,200 for a household of three, scaling upward from there. The unit is subject to resale controls and ongoing monitoring, meaning future appreciation upside is capped by program rules, not by market forces. Applications go through the DAHLIA SF Housing Portal with a May 21, 2026 deadline.

At 1,204 square feet across three full bathrooms, the floorplan is efficient. The property has been on the market 64 days — longer than any of the five for-sale comps nearby, which likely reflects the program's structured application timeline rather than buyer hesitation. Lot size is listed at roughly 0.41 acres, an unusually large footprint for an attached townhouse in this ZIP, though that figure may reflect parcel-level data for the broader development rather than a private yard.

The investment case

A 19.7% cash-on-cash return against a city average of negative 11.0% makes the financial case here almost self-evident — but the BMR resale restrictions demand a closer look before running the numbers.

List Price

$428,441

Monthly Payment (PITI+HOA)

$3,315

Principal & Interest

$2,139

Property Tax

$418

Insurance

$143

HOA

$501

PMI

$114

Est. Monthly Rent

$4,721

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

19.7%

Cap Rate

11.1%

Monthly Cash Flow

$1,406

Gross Rent Multiplier

7.6

DSCR

1.9

At a $428,441 purchase price and an estimated monthly rent of $4,721, the gross rent multiplier comes in at 7.6 — meaning the property pays for itself in rent in under eight years on a gross basis. The cap rate is 11.1%, with net operating income of $3,963 per month. These are numbers you'd expect to see in secondary Midwest markets, not San Francisco.

The monthly payment stack totals $3,315: $2,139 in principal and interest at the current 30-year fixed rate of 6.49%, $418 in property taxes, $143 in insurance, $501 in HOA fees, and $114 in PMI. That leaves projected monthly cash flow of $1,406. The debt service coverage ratio of 1.9 means the property generates nearly twice the income needed to cover its debt obligations — a cushion that gives a lender confidence and an investor a buffer against vacancy or rent softness.

Compared to the city's tenth-best cash-on-cash deal at 7.06%, this property's 19.7% figure is in a different category. San Francisco's average investor is underwater at negative 11.0% CoC; this deal sits roughly 31 percentage points above that baseline.

The caveat that overrides all of this: the BMR resale controls. When the owner sells, the resale price is capped by the program formula — not by market appreciation. An investor buying this as a rental would need to confirm whether the program permits non-owner-occupied use at all. The listing flags the unit as non-owner-occupied in public records, but the program description explicitly targets first-time homebuyers, creating a potential conflict that requires direct clarification with MOHCD before any investment decision. Figures exclude depreciation tax benefits, which vary by individual tax situation.

Annual return outlook

The 5-year total ROI of 26.5% is built primarily on cash flow, with appreciation and mortgage paydown as secondary contributors.

Cash flow does the heavy lifting here, contributing 19.7 percentage points of the 26.5% total ROI. Mortgage paydown adds an estimated 4.0 points as principal amortizes over the holding period. Appreciation contributes an estimated 2.8 points annually — though that figure is a modeled estimate for San Francisco broadly, not a property-specific projection, and should be treated with appropriate skepticism given the BMR resale controls that cap price appreciation for this unit specifically.

That last point matters more here than on a standard listing. In a typical San Francisco investment, appreciation is often the primary return driver — the city's median listing price of $998,000 leaves little room for cash flow at current rates. Here, the math is inverted: cash flow is the engine, and appreciation is a secondary lever that may not fully materialize if resale controls limit the exit price.

Mortgage paydown is the most reliable of the three components. At a 6.49% rate on a loan sized for a $428,441 purchase, amortization in the early years is slower than in later years, but the 4.0% paydown contribution over five years is a reasonable estimate for equity accumulation through scheduled payments alone.

For an investor who can navigate the program restrictions, the 5-year return is front-loaded with cash flow in a city where most deals produce none.

How it compares to nearby for-sale listings

Five active 3-bedroom listings in ZIP 94124 provide a pricing baseline — and they make 263 Friedell St look like a different asset class entirely.

The for-sale comp median in 94124 sits at $848,000, nearly double this property's $428,441 list price. The closest comp by price is 1535 McKinnon Ave at $499,998 — still 17% above this listing — and that unit has been sitting 29 days. At the other end, 1698 Armstrong Ave is listed at $1,495,000 for 2,186 square feet, which works out to roughly $684 per square foot.

263 Friedell St at $428,441 for 1,204 square feet implies roughly $356 per square foot — a significant discount to the comp set, but one that's explained entirely by the BMR program pricing, not by any deficiency in the property itself. Market-rate buyers in this ZIP are paying $500K to $895K for similar bedroom counts.

The 64-day DOM for this listing is longer than four of the five comps, but again, the structured DAHLIA application process — with an April 24 listing date and May 21 deadline — creates an artificial timeline that isn't comparable to standard market days-on-market figures. The two newest comps, at 5 and 6 days respectively, reflect open-market velocity that simply doesn't apply here.

The takeaway from the comp table is straightforward: this property's price is program-determined, not market-determined. The comps confirm that market-rate 3-bedroom inventory in 94124 trades at roughly twice the price.

Rental demand in this zip

There are no directly comparable rental listings in ZIP 94124 with 3 bedrooms to benchmark against, which limits confidence in the $4,721 monthly rent estimate.

The estimated monthly rent of $4,721 comes from a modeled estimate, not from active rental comps in the immediate ZIP. With zero comparable rentals identified in 94124 for a 3-bedroom unit, the projection is extrapolated rather than market-confirmed — a meaningful distinction for underwriting purposes.

That said, $4,721 for a 3-bedroom, 3-bathroom townhouse in San Francisco is not an implausible number citywide. San Francisco's rental market is among the most expensive in the country, and 1,204 square feet with three full bathrooms would command premium pricing in most neighborhoods. The question is whether 94124 specifically supports that rent level, and the absence of local comps makes that harder to confirm.

An investor underwriting this deal conservatively should stress-test the rent assumption. At $4,000 per month — roughly 15% below the estimate — monthly cash flow would compress to approximately $685, and the CoC return would fall to around 9-10%. Still positive, still well above the city average, but a different risk profile. At $3,500, cash flow turns marginally negative. The $501 monthly HOA fee is a fixed drag that doesn't flex with rent, making it the most important cost line to verify independently before closing.

The program context adds another layer: if the unit must be owner-occupied under BMR rules, the rental income projection is moot. Confirming permissible use with MOHCD is the prerequisite step before any rental analysis applies.

Who this property suits + risks to weigh

The financial metrics here are exceptional by San Francisco standards, but the BMR program structure means this property suits a very specific buyer — and may not suit a traditional rental investor at all.

Best fit

The ideal buyer is an income-eligible first-time homeowner who intends to occupy the property and wants to benefit from a below-market entry price in one of the country's most expensive housing markets. For that buyer, the $428,441 price — roughly 57% of the 94124 comp median — is a genuine wealth-building opportunity, even with resale controls limiting future appreciation gains.

A house-hacker who occupies one bedroom and rents the remaining two could potentially generate meaningful income while satisfying the owner-occupancy requirement. With three full bathrooms, the layout supports that arrangement more comfortably than a typical 3/1 or 3/2 configuration. That's a narrow investor profile, but it's a real one.

Risks to weigh

The resale controls are the dominant risk for anyone thinking about this as a traditional investment. The program caps the future sale price, which eliminates the appreciation component of the return — the 2.8% annual appreciation estimate in the financial model likely does not apply to a BMR unit. The effective 5-year ROI for a restricted resale unit is lower than the 26.5% headline figure suggests.

The $501 monthly HOA fee is the second-largest fixed cost after the mortgage payment. That's a substantial ongoing obligation, and HOA financial health — reserves, litigation, deferred maintenance — requires independent verification. PMI at $114 per month adds further cost until the loan-to-value ratio reaches the threshold for removal.

Finally, the 64-day DOM, while explained by the application timeline, means no buyer has yet cleared the program's income and eligibility screening. Execution risk is real until a qualified buyer is confirmed through MOHCD's process.