355 1st St Unit S207, San Francisco, CA 94105 — 27.8% Cash-on-Cash

About this property

355 1st St Unit S207 is a 2-bed, 2-bath condo in San Francisco's Rincon Hill area, listed at $364,812 with 963 square feet of living space.

What makes this unit structurally unusual before any financial analysis begins: it's a Below Market Rate (BMR) unit offered through the Mayor's Office of Housing and Community Development, restricted to first-time homebuyers who qualify at 100% Area Median Income. That program constraint is the direct source of the pricing anomaly — at $364,812, this condo is listed at roughly one-quarter of the $1,449,000 median for comparable 2-bed units in ZIP 94105.

The Metropolitan building itself is a full-amenity high-rise: 24-hour doorman, concierge, indoor heated pool, spa, sauna, fitness center, rooftop deck, and a theater room. The unit has been on market 44 days, which is consistent with the BMR application timeline rather than a demand problem — the listing explicitly ties availability to a DAHLIA portal application deadline of June 4, 2026.

Tax-assessed value sits at $407,622, above the list price, a common feature of BMR units where assessed value reflects market-rate comparables rather than the restricted sale price. The lot covers 0.89 acres, consistent with a mid-rise residential tower footprint. Figures exclude depreciation tax benefits, which vary by individual tax situation.

The investment case

At $364,812, this BMR unit generates an estimated $1,688 in monthly cash flow against a total payment of $3,662 — a 27.8% cash-on-cash return that sits roughly 39 percentage points above San Francisco's city average of -11%.

List Price

$364,812

Monthly Payment (PITI+HOA)

$3,662

Principal & Interest

$1,845

Property Tax

$356

Insurance

$122

HOA

$1,242

PMI

$97

Est. Monthly Rent

$5,350

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

27.8%

Cap Rate

12.8%

Monthly Cash Flow

$1,688

Gross Rent Multiplier

5.7

DSCR

2.1

The math starts with a list price that's a fraction of the market. Estimated monthly rent comes in at $5,350, producing a gross rent multiplier of 5.7 — a figure that would be considered aggressive in most U.S. markets, let alone San Francisco. Against a total monthly payment of $3,662 (principal and interest at $1,845, property tax at $356, insurance at $122, HOA at $1,242, and PMI at $97), the monthly cash flow lands at $1,688.

The HOA fee of $1,242 deserves attention. It's the single largest line item after principal and interest, and it reflects the full-service nature of the Metropolitan building. Investors underwriting this deal need to treat that number as fixed and non-negotiable — it doesn't compress if rent softens.

Net operating income is $3,889 per month, yielding a cap rate of 12.8%. The debt service coverage ratio of 2.1 means the property generates more than twice the income needed to service the mortgage — a cushion that most San Francisco deals never approach. The city average cash-on-cash of -11% means the typical SF investment requires ongoing capital infusion just to stay solvent. This deal runs the opposite direction.

The BMR price restriction is the entire thesis. Without it, the financial profile collapses to something resembling the rest of the 94105 market.

Annual return outlook

The 34.9% projected 5-year total ROI is driven primarily by cash flow, with appreciation and mortgage paydown as supporting contributors.

Of the 34.9% total return, cash flow contributes 27.8%, mortgage paydown adds 4.4%, and appreciation accounts for an estimated 2.8%. Cash flow is doing the heavy lifting here — which is the inverse of most San Francisco investment theses, where appreciation is typically the only viable return driver.

The 2.8% annual appreciation figure is an estimate rather than a data-confirmed rate, so it should be treated as a soft assumption. Even if appreciation comes in flat, the cash-flow component alone would make this deal competitive against nearly every other 2-bed condo in the city. The 7.06% cash-on-cash return of the tenth-best deal in San Francisco's top-10 leaderboard confirms this property is in a different tier entirely.

Mortgage paydown at 4.4% reflects the equity accumulation from amortization at a $364,812 basis — modest in absolute dollar terms, but meaningful as a percentage of the down payment. The combination of all three components at a price point this far below market produces a return profile that's genuinely uncommon for this zip code.

The critical caveat: BMR resale controls restrict how much the owner can capture on exit. Appreciation gains may be partially or fully limited by MOHCD resale formulas. Investors should review the specific resale restriction terms before assuming the appreciation component is fully realizable.

How it compares to nearby for-sale listings

Five comparable 2-bed condos are currently listed in ZIP 94105, with a median asking price of $1,449,000 — nearly four times this property's $364,812 list price.

The price-per-square-foot spread tells the story clearly. At $364,812 for 963 square feet, this unit prices at roughly $379 per square foot. The comp set ranges from $1,099,000 at 1,287 square feet (about $854/sqft) to $2,450,000 at 1,142 square feet (about $2,145/sqft), with an outlier at $13,000,000 for a 3,256-square-foot unit. Even the most affordable market-rate comp in the set trades at more than double this property's per-square-foot price.

That gap isn't a market inefficiency an investor can exploit by finding similar deals — it's a direct product of the BMR program's income and eligibility restrictions. The comps are useful for confirming that the rental income estimate of $5,350 per month is plausible given what full-market units in the same zip command, but they don't represent replicable acquisition opportunities at this price.

Days on market for the comp set ranges from 1 to 43 days, with this property at 44 days. That's not a staleness signal here — the listing explicitly states that applications open May 14, 2026, with a deadline of June 4, 2026. The market clock is running on a program timeline, not buyer demand.

Rental demand in this zip

No directly comparable rental listings were identified in ZIP 94105 for 2-bedroom units, leaving the $5,350 monthly rent estimate without local comp validation.

The absence of rental comps in the immediate zip is a data gap worth acknowledging. The $5,350 estimate is the figure underpinning the entire cash-flow thesis — the 27.8% cash-on-cash return, the $1,688 monthly cash flow, and the 12.8% cap rate all trace back to that single number.

What context exists points toward plausibility. The for-sale comp set shows 2-bed units in 94105 trading between $1,099,000 and $2,450,000 at market rate. Renters priced out of ownership in that range typically pay premium rents to stay in the neighborhood. A $5,350 rent for a 963-square-foot 2-bed in a full-amenity high-rise with a 24-hour doorman and indoor pool is consistent with that dynamic, even if it can't be confirmed against active rental listings right now.

Investors should conduct independent rental market research before closing. The lack of comp data doesn't invalidate the estimate, but it does mean the cash-flow projection carries more uncertainty than a deal with 10 active rental comps anchoring the rent assumption. A 10% rent miss — down to roughly $4,815 — would still produce positive cash flow, but the margin of safety narrows meaningfully.

Who this property suits + risks to weigh

This property is suited to an income-eligible first-time buyer who wants to own in San Francisco at a fraction of market cost — it's not a conventional investor play.

Best fit

The BMR program eligibility requirements define the buyer profile precisely. The purchaser must be a first-time homebuyer with household income at or below the 100% AMI thresholds ($124,700 for two people, $140,250 for three). That rules out most professional real estate investors. The ideal buyer is someone who qualifies under those income limits, intends to occupy the unit, and recognizes that the below-market acquisition price creates a rental income potential that a typical owner-occupant might eventually leverage — for instance, by renting the unit if they later relocate, subject to MOHCD program rules.

The financial metrics are genuinely strong on paper: 27.8% cash-on-cash, $1,688 monthly cash flow, a 2.1 DSCR. In a city where the average investment property runs at -11% cash-on-cash, those numbers are exceptional. The building's amenities — concierge, pool, sauna, rooftop deck — support the rent estimate and tenant retention.

Risks to weigh

The resale restriction is the primary risk. BMR units are subject to MOHCD resale controls that typically cap appreciation gains on exit, meaning the 2.8% annual appreciation component of the 34.9% total ROI may not be fully realizable. Buyers should request and review the complete resale restriction agreement before submitting an application.

The HOA fee of $1,242 per month is the second risk. It's non-negotiable, it can increase, and it represents 34% of the total monthly payment. Any special assessment from the building's reserve fund would add to that burden. The rental income estimate also lacks local comp support, which adds uncertainty to the cash-flow projection.