395 6th St #305, San Francisco, CA 94107 — 33.3% Cash-on-Cash

About this property

Unit 305 at 395 6th Street is a two-bedroom, two-bath condo in a newly built San Francisco residential building, listed at $449,000 under the city's Below Market Rate ownership program.

The unit spans 819 square feet in a split-bedroom layout — primary and secondary bedrooms on opposite sides, which works for either a roommate situation or a dedicated home office without sacrificing privacy. East-facing orientation means consistent morning light, a real differentiator in a city where unit exposure is often an afterthought. The building includes an attended lobby and a rooftop terrace.

This is new construction, which strips out the deferred-maintenance risk that haunts older San Francisco stock. The HOA fee runs $589 per month — meaningful, but typical for a building with staffed common areas. At 22 days on market with no price reduction from the original list, demand has been measured rather than frenzied, likely because the BMR program's income and first-time-buyer eligibility requirements narrow the applicant pool by design.

Lot size is listed at zero square feet, confirming a standard condominium interest with no land component. Buyers should factor that into any long-term land-value thesis.

The investment case

A 33.3% cash-on-cash return against a ZIP 94107 average of 7.4% is the headline, but the underlying mechanics — a 13.8% cap rate and $2,489 in monthly cash flow — deserve a closer look.

List Price

$449,000

Monthly Payment (PITI+HOA)

$3,419

Principal & Interest

$2,242

Property Tax

$438

Insurance

$150

HOA

$589

PMI

$0

Est. Monthly Rent

$5,908

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

33.3%

Cap Rate

13.8%

Monthly Cash Flow

$2,489

Gross Rent Multiplier

6.3

DSCR

2.3

At a $449,000 purchase price with 20% down, the all-in monthly payment lands at $3,419 (principal and interest: $2,242; property tax: $438; insurance: $150; HOA: $589). Against an estimated monthly rent of $5,908, that leaves $2,489 in gross monthly cash flow before income taxes and maintenance reserves. The debt service coverage ratio of 2.3 means rental income covers the mortgage payment more than twice over — a cushion that gives the investment real room to absorb vacancy or unexpected costs.

The cap rate of 13.8% and net operating income of $5,169 per month are the numbers that stand out most against the San Francisco backdrop. The city's average cash-on-cash sits at negative 11.0%, meaning most condos here destroy cash flow at 20% down. This property's 33.3% CoC doesn't just beat the city — it beats the tenth-best deal on the city leaderboard (7.06%) by more than four times. That gap is almost entirely explained by the BMR discount: comparable market-rate two-bedrooms in ZIP 94107 are listed between $625,000 and $1.6 million. Buying at $449,000 compresses the cost basis dramatically.

The gross rent multiplier of 6.3 reinforces the value. A GRM under 10 in San Francisco is unusual. Figures exclude depreciation tax benefits, which vary by individual tax situation.

The investment case here is straightforward: the BMR price creates a structural cost advantage that the cash-flow numbers reflect directly.

Annual return outlook

The 40.1% projected five-year total ROI is driven almost entirely by cash flow, with appreciation and mortgage paydown as supporting contributors.

The ROI breakdown assigns 33.3% to cash flow, 4.0% to mortgage paydown, and 2.8% to appreciation — an estimated figure, not a data-scraped one. That ordering matters. Most San Francisco investment theses lean heavily on appreciation; this property inverts the stack, with cash flow doing the heavy lifting and appreciation as a secondary tailwind.

The 2.8% annual appreciation estimate is modest by historical San Francisco standards, and using it conservatively is the right call given that BMR units carry resale restrictions through the MOHCD program. When the time comes to sell, the resale price will likely be governed by the same affordability formula that set the purchase price — meaning appreciation upside may be capped relative to market-rate condos. Buyers should review the full program restrictions on DAHLIA before underwriting any exit-value assumption.

Mortgage paydown contributes 4.0% over five years at a 6.49% fixed rate, a mechanical and predictable component. Combined with cash flow, the investment's return profile is unusually front-loaded — you're collecting real money each month rather than waiting for an exit event to realize gains.

For investors who need current income rather than deferred appreciation, the five-year structure here is genuinely differentiated from typical San Francisco condo investments.

How it compares to nearby for-sale listings

Five comparable two-bedroom condos are currently listed in ZIP 94107, and the price gap between this property and its peers is stark.

The for-sale comp median in 94107 sits at $899,000 — exactly double this property's $449,000 ask. On a per-square-foot basis, this unit at 819 square feet implies roughly $548/sqft. The nearest market-rate two-bedroom at 260 King Street (996 sqft, $899,000) prices at $903/sqft — 65% higher. The RENOU building's own market-rate Sage-Y plan (883 sqft, $879,000) prices at $995/sqft, nearly twice this unit's effective rate.

That spread isn't a market inefficiency — it's the BMR program working as intended. The discount is real, and it's large. What it creates for an investor is a cost basis that the rental market doesn't recognize. A tenant paying $5,908 per month doesn't know or care what the landlord paid; the rent is set by supply and demand, not by the purchase price.

Days on market across the comp set range from 1 to 24 days, suggesting active buyer interest in the zip at market-rate prices. This unit's 22 days reflects the BMR application process timeline more than any demand signal — the program requires income verification, first-time-buyer education, and lender pre-approval, all of which slow the clock.

Rental demand in this zip

Rental comp data for ZIP 94107 two-bedroom condos is thin, which introduces uncertainty into the cash-flow projection.

No rental comps were identified in ZIP 94107 matching this property's bedroom count. The estimated monthly rent of $5,908 is a modeled figure, not a comp-confirmed one. That's a meaningful caveat. In a market where rents can vary sharply by building quality, floor, and specific location within a zip code, the absence of direct comparables means the cash-flow projection carries more estimation risk than the clean numbers suggest.

What works in favor of the $5,908 estimate: San Francisco's South of Market and Mission Bay corridors have historically supported strong two-bedroom rents, and new construction with amenities like an attended lobby and rooftop terrace typically commands a premium over older stock. The building's design positioning and new-construction status are legitimate rent-support factors.

What works against it: BMR ownership units may carry lease restrictions under MOHCD program rules that limit the owner's ability to rent freely. Buyers should confirm whether the program permits non-owner-occupied rental use before underwriting any rental income. The listing description notes the property is flagged as non-owner-occupied, but program compliance requirements should be verified directly with MOHCD.

The cash-flow math is compelling on paper, but the rental income estimate needs validation against actual lease comps before an investor commits.

Who this property suits + risks to weigh

This property suits a first-time buyer with investor intent who qualifies under MOHCD's income limits and can navigate the program's compliance requirements.

Best fit

The ideal buyer here is someone who qualifies as a first-time homebuyer, earns at or below 100% of the Area Median Income (up to $124,700 for a two-person household in 2025), and wants to occupy the unit while building equity at a cost basis well below market. The 33.3% cash-on-cash return and $2,489 monthly cash flow make this look like a pure investment play, but the BMR program's first-time-buyer and income requirements mean the buyer profile is constrained. An owner-occupant who eventually converts the unit to a rental — if program rules permit — captures both the lifestyle benefit and the investment upside.

For a qualified buyer, the financial structure is genuinely strong: a $2,489 monthly cash flow against a $449,000 purchase price is a combination that doesn't exist at market rate anywhere in San Francisco right now. The city median listing price is $998,000, and the city's average cash-on-cash is negative 11.0%. This property is a structural outlier, not a market-rate find.

Risks to weigh

The BMR program's resale restrictions are the primary risk. Exit pricing will likely be governed by MOHCD formulas, not market appreciation, which caps the upside that makes San Francisco real estate attractive to most investors. The $589 monthly HOA fee is a fixed cost that doesn't compress with market conditions. Rental eligibility under the program needs direct confirmation — the non-owner-occupied flag in public records doesn't override program compliance requirements. And the rent estimate of $5,908, unsupported by local rental comps, should be stress-tested at 10-15% below the modeled figure before treating the cash flow as reliable.