11946 Dorothy St

Los Angeles, CA 90049

$4,250,000D

14 bd · 14.0 ba · 9,244 sqft · Built 1970 · MultiFamily · Pending · 14 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $30,070/mo
• Mortgage (P&I): −$22,287
• Tax + insurance: −$4,120
• HOA: −$0
• Vac / Maint / Mgmt: −$6,315
• Net cashflow: $-2,652/mo
• Annual: $-31,828/yr
• Cap rate: 5.54%
• Cash-on-cash: -2.67%
• DSCR: 0.88
• 1% rule: 0.71%
• Cash to close: $1,190,000

Investor read

• This is a 5 × 3-bed/?-bath units multifamily listed at $4.25M.
• At list price, monthly cash flow is $-3k ($-32k/yr) — negative. Per door: $-530/mo.
• To cash-flow at today's rent, offer at most $3.78M (11.0% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $3.01M (29.2% below list).
• Only 14 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $3.01M (29.2% below list) — sets the bar for 1% rule.
• In year one you build about $298k of equity ($29k loan paydown + $269k appreciation (6.3% local appreciation)).
• Location reads 68/100 on livability (#273 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment B; Watch: health & safety C-, schools 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.
• Market conditions: Rents falling (-3.0%/yr); 283 active listings in the ZIP; 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.
• Current owner paid $1.60M; list at $4.25M implies a 166% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$477k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.5% vs local median 2.1% in 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 $30,070/mo this rent would consume 212% of the median local household income ($171k/yr) (locally 1633% 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?
• 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 1970 — 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?