201 Ocean Ave Unit 1105B

Santa Monica, CA 90402

$799,999F

1 bd · 1.0 ba · 868 sqft · Built 1971 · Condo · Active · 145 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,296/mo
• Mortgage (P&I): −$4,195
• Tax + insurance: −$1,187
• HOA: −$2,237
• Vac / Maint / Mgmt: −$902
• Net cashflow: $-4,226/mo
• Annual: $-50,710/yr
• Cap rate: -0.05%
• Cash-on-cash: -22.64%
• DSCR: -0.01
• 1% rule: 0.54%
• Cash to close: $224,000

Investor read

• This is a 1-bed/1.0-bath condo listed at $800k.
• At list price, monthly cash flow is $-4k ($-51k/yr) — negative.
• To cash-flow at today's rent, offer at most $167k (79.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $430k (46.3% below list).
• It's been on market 145 days — a 12% lower offer ($704k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $167k (79.1% below list) — sets the bar for cash-flow.
• In year one you build about $86k of equity ($6k loan paydown + $80k appreciation (10.0% local appreciation)).
• Location reads 72/100 on livability (#178 in CA) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute 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.
• Watch-outs: HOA is 52% of rent.
• Market conditions: Rents rising (+2.0%/yr); 86 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 21d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 11 sale attempts since 24y 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.
• Current owner paid $380k; list at $800k implies a 111% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$137k 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 -0.0% vs local median 1.2% in Santa Monica — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 32% of the median local income ($159k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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 145 days. Have you received any prior offers? Is the seller open to a 79% concession, seller financing, or rate buy-down credit?
• Built in 1971 — 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.
• 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?