1017 S Herbert Ave

East Los Angeles, CA 90023

$1,050,000C

24 bd · 20.0 ba · 2,936 sqft · Built 1958 · MultiFamily · Active · 683 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,362/mo
• Mortgage (P&I): −$5,506
• Tax + insurance: −$1,750
• HOA: −$0
• Vac / Maint / Mgmt: −$2,806
• Net cashflow: $3,300/mo
• Annual: $39,596/yr
• Cap rate: 10.06%
• Cash-on-cash: 13.47%
• DSCR: 1.60
• 1% rule: 1.27%
• Cash to close: $294,000

Investor read

• This is a 4 × 6-bed/?-bath units multifamily listed at $1.05M. Condition is rated fair.
• At list price, monthly cash flow is $3k ($40k/yr) — positive. Per door: $825/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($13k rent vs $1.05M).
• It's been on market 683 days — a 12% lower offer ($924k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $924k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $32k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#594 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, schools B+; Watch: employment C-, health & safety D, crime F.
• Los Angeles Unified (urban): math 29% / reading 54% proficiency, ranked #223 of 517 in CA (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1958 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 57 active listings in the ZIP; 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 since 6y ago; this cycle's ask has dropped $100k (9%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• 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 10.1% vs local median 3.5% in East Los Angeles — 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 $13,362/mo this rent would consume 272% of the median local household income ($59k/yr) (locally 2670% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 683 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1958 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Why hasn't it sold? Are there any deal-killer items the seller is aware of (foundation, flood, title, zoning, code violations)?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?

Repairs flagged (vision-AI assessment)

• Major: Kitchen flooring — The linoleum flooring in the kitchen is visibly worn and needs replacement.
• Major: Living room flooring — The carpet in the living room is worn and needs replacement.
• Major: Kitchen appliances — The small refrigerator in the kitchen is outdated and may need replacement.
• Minor: Paint — The paint quality is not clear, but there may be minor touch-ups needed.