8219 2nd St

Paramount, CA 90723

$1,875,000D+

17 bd · 7.0 ba · 6,006 sqft · Built 1946 · MultiFamily · Active · 3 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $17,715/mo
• Mortgage (P&I): −$9,833
• Tax + insurance: −$2,385
• HOA: −$0
• Vac / Maint / Mgmt: −$3,720
• Net cashflow: $1,777/mo
• Annual: $21,330/yr
• Cap rate: 7.43%
• Cash-on-cash: 4.06%
• DSCR: 1.18
• 1% rule: 0.94%
• Cash to close: $525,000

Investor read

• This is a 6 × 3-bed/1.2-bath units multifamily listed at $1.88M.
• At list price, monthly cash flow is $2k ($21k/yr) — positive. Per door: $296/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.77M (5.5% below list).
• Only 3 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $1.77M (5.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $13k of loan paydown is wiped out by about $56k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#432 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+; Watch: schools D, crime F, amenities F.
• Paramount Unified (suburban): math 15% / reading 34% proficiency, ranked #416 of 517 in CA (top 80%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 76% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1946 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.0%/yr); 50 active listings in the ZIP; 1 comparable units currently listed for rent nearby; solid renter incomes; 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.
• 19 sale attempts since 18y ago 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 $1.12M; list at $1.88M implies a 67% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.4% vs local median 3.3% in Paramount — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• At $17,715/mo this rent would consume 282% of the median local household income ($75k/yr) (locally 2420% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1946 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are D-rated, which usually means shorter tenancies and higher turnover. Who's the typical renter profile here, and what's been the actual vacancy rate?
• 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.