947 7th St

Santa Monica, CA 90403

$2,650,000C-

10 bd · 8.1 ba · 6,313 sqft · Built 1955 · MultiFamily · Active · 85 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $23,532/mo
• Mortgage (P&I): −$13,897
• Tax + insurance: −$4,417
• HOA: −$0
• Vac / Maint / Mgmt: −$4,942
• Net cashflow: $277/mo
• Annual: $3,321/yr
• Cap rate: 6.42%
• Cash-on-cash: 0.45%
• DSCR: 1.02
• 1% rule: 0.89%
• Cash to close: $742,000

Investor read

• This is a 3 × 3-bed/?-bath units multifamily listed at $2.65M. Condition is rated good.
• At list price, monthly cash flow is $277 ($3k/yr) — positive. Per door: $92/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 $2.35M (11.2% below list).
• It's been on market 85 days — a 6% lower offer ($2.49M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.35M (11.2% below list) — sets the bar for 1% rule.
• In year one you build about $16k of equity ($18k loan paydown + $-3k appreciation (-0.1% local appreciation)).
• Location reads 72/100 on livability (#178 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: health & safety C-, crime F, cost of living F.
• Santa Monica-Malibu Unified (urban): math 61% / reading 74% proficiency, ranked #123 of 1,400 in CA (top 9%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Roosevelt Elementary (594 students, 18% FRL); Lincoln Middle (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 854 students, 22% FRL); Santa Monica High (2,678 students, 30% FRL) — zoned schools at 23% FRL track the district average.
• Zoned-school proficiency averages 24% at this address vs 68% district-wide (-43 pts) — the specific schools serving this property underperform the Santa Monica-Malibu Unified average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1955 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.1%/yr); 136 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 57d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 100% 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.
• By year 8, paydown + projected appreciation supports a ~$177k 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 6.4% vs local median 1.3% in Santa Monica — 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 $7,844/mo per unit this rent would consume 77% of the median local household income ($122k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 85 days. Have you received any prior offers? Is the seller open to a 11% 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?
• Built in 1955 — 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 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?