4320 Russell Ave

Los Angeles, CA 90027

$2,500,000D

9 bd · 9.0 ba · 6,036 sqft · Built 1964 · MultiFamily · Active · 81 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $20,969/mo
• Mortgage (P&I): −$13,110
• Tax + insurance: −$1,493
• HOA: −$0
• Vac / Maint / Mgmt: −$4,403
• Net cashflow: $1,962/mo
• Annual: $23,542/yr
• Cap rate: 7.23%
• Cash-on-cash: 3.36%
• DSCR: 1.15
• 1% rule: 0.84%
• Cash to close: $700,000

Investor read

• This is a 3 × 3-bed/?-bath units multifamily listed at $2.50M.
• At list price, monthly cash flow is $2k ($24k/yr) — positive. Per door: $654/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 $2.10M (16.1% below list).
• It's been on market 81 days — a 6% lower offer ($2.35M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.10M (16.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $75k of value loss. Plan a longer hold.
• 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-, crime F, cost of living 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.
• Zoned schools: Franklin Avenue Elementary (401 students, 22% FRL); Thomas Starr King Middle School Film And Media Magnet (1,722 students, 72% FRL); John Marshall Senior High (math 57% / reading 80%, grade B, #133 of 1,170 statewide, top 11%, 1,950 students, 72% FRL).
• Zoned-school proficiency averages 68% at this address vs 42% district-wide (+27 pts) — the actual schools serving this property are materially stronger than the Los Angeles Unified average implies; a family-tenant draw the district grade alone would hide.
• Market conditions: Rents rising (+2.3%/yr); 123 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.
• Current owner paid $150k; list at $2.50M implies a 1567% gain — meaningful room to come down on a strong offer.
• 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 7.2% 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 $20,969/mo this rent would consume 266% of the median local household income ($95k/yr) (locally 4571% 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 81 days. Have you received any prior offers? Is the seller open to a 16% 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 1964 — 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 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?