215 S Madison

Pasadena, CA 91101

$11,500,000C

42 bd · 42.0 ba · 34,815 sqft · Built 1972 · MultiFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $105,173/mo
• Mortgage (P&I): −$60,307
• Tax + insurance: −$8,618
• HOA: −$0
• Vac / Maint / Mgmt: −$22,086
• Net cashflow: $14,162/mo
• Annual: $169,942/yr
• Cap rate: 7.77%
• Cash-on-cash: 5.28%
• DSCR: 1.23
• 1% rule: 0.91%
• Cash to close: $3,220,000

Investor read

• This is a 17×1bd/1.0ba + 17×2bd/2.0ba units multifamily listed at $11.50M.
• At list price, monthly cash flow is $14k ($170k/yr) — positive. Per door: $417/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 $10.52M (8.5% below list).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $10.52M (8.5% below list) — sets the bar for 1% rule.
• In year one you build about $205k of equity ($80k loan paydown + $125k appreciation (1.1% local appreciation)).
• Location reads 72/100 on livability (#181 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: schools D+, health & safety D+, crime F.
• Pasadena Unified (urban): math 42% / reading 60% proficiency, ranked #123 of 517 in CA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents flat; 82 active listings in the ZIP; 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.
• 4 sale attempts since 2y 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.
• At projected returns (1.1% appreciation + 0.0% rent growth), your $3.22M cash investment doubles in ~9 years — after that, you're playing with house money.
• By year 4, paydown + projected appreciation supports a ~$739k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• 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 7.8% vs local median 1.5% in Pasadena — 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 $105,173/mo this rent would consume 1437% of the median local household income ($88k/yr) (locally 2327% 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 1972 — 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?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.