403 N Palm Dr #3

Beverly Hills, CA 90210

$2,500,000D

2 bd · 3.0 ba · 3,025 sqft · Built 1983 · Condo · Active · 30 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,618/mo
• Mortgage (P&I): −$13,110
• Tax + insurance: −$1,739
• HOA: −$2,244
• Vac / Maint / Mgmt: −$1,600
• Net cashflow: $-11,074/mo
• Annual: $-132,892/yr
• Cap rate: 0.98%
• Cash-on-cash: -18.98%
• DSCR: 0.16
• 1% rule: 0.30%
• Cash to close: $700,000

Investor read

• This is a 2-bed/3.0-bath condo listed at $2.50M.
• At list price, monthly cash flow is $-11k ($-133k/yr) — negative.
• To cash-flow at today's rent, offer at most $544k (78.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $762k (69.5% below list).
• It's been on market 30 days — a 2% lower offer ($2.46M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $544k (78.3% below list) — sets the bar for cash-flow.
• In year one you build about $256k of equity ($17k loan paydown + $239k appreciation (9.6% local appreciation)).
• Location reads 74/100 on livability (#138 in CA, #4,810 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: housing C-, health & safety C-, crime F.
• Beverly Hills Unified (suburban): math 57% / reading 73% proficiency, ranked #61 of 517 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 7% free/reduced lunch — higher-income household profile.
• Zoned schools: Hawthorne Elementary (math 65% / reading 74%, grade A-, #147 of 1,571 statewide, top 10%, 569 students, 12% FRL); Beverly Vista Middle (math 54% / reading 74%, grade B+, #47 of 498 statewide, top 9%, 769 students, 17% FRL); Beverly Hills High (math 55% / reading 77%, grade B, #153 of 1,170 statewide, top 13%, 1,220 students, 17% FRL).
• Watch-outs: HOA is 29% of rent.
• Market conditions: Rents rising (+1.7%/yr); 310 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 19,697 units permitted in Los Angeles County in 2024 (9,426 in 5+ unit buildings).
• Los Angeles County population projected at +9% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 2 sale attempts with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Current owner paid $995k; list at $2.50M implies a 151% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$411k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $7,618/mo this rent would consume 49% of the median local household income ($188k/yr) (locally 911% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are A-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.