24055 Paseo Del Lago #909

Laguna Woods, CA 92637

$25,000C

1 bd · 1.0 ba · 553 sqft · Built 1974 · Condo · Active · 228 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,827/mo
• Mortgage (P&I): −$131
• Tax + insurance: −$20
• HOA: −$2,792
• Vac / Maint / Mgmt: −$594
• Net cashflow: $-710/mo
• Annual: $-8,522/yr
• Cap rate: -27.79%
• Cash-on-cash: -121.74%
• DSCR: -4.42
• 1% rule: 11.31%
• Cash to close: $7,000

Investor read

• This is a 1-bed/1.0-bath condo listed at $25k.
• At list price, monthly cash flow is $-710 ($-9k/yr) — negative.
• Rent doesn't cover operating costs at any purchase price — skip.
• Meets the 1% rule at list price ($3k rent vs $25k).
• It's been on market 228 days — a 12% lower offer ($22k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $22k (12.0% below list) — sets the bar for market timing.
• In year one you build about $2k of equity ($173 loan paydown + $1k appreciation (5.9% local appreciation)).
• Location reads 72/100 on livability (#200 in CA) — a middle-class / working-renter tenant base. Strengths: crime A+, commute A+; Watch: schools C-, amenities D+, cost of living F.
• Saddleback Valley Unified (suburban): math 51% / reading 73% proficiency, ranked #67 of 517 in CA (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: HOA is 99% of rent.
• Market conditions: Rents rising fast (+6.8%/yr); 191 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 9d on market — plan ~1-2 weeks tenant-placement turnaround); 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• 4 sale attempts since 16y ago; this cycle's ask has dropped $35k (58%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate -27.8% vs local median 2.4% in Laguna Woods — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $2,827/mo this rent would consume 57% of the median local household income ($59k/yr) (locally 1572% 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?
• It's been on market 228 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Built in 1974 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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.
• 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.