3524 E Avenue R #149

Palmdale, CA 93550

$105,000B

2 bd · 2.0 ba · 1,140 sqft · Built 1967 · Manufactured · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,639/mo
• Mortgage (P&I): −$551
• Tax + insurance: −$175
• HOA: −$0
• Vac / Maint / Mgmt: −$554
• Net cashflow: $1,359/mo
• Annual: $16,309/yr
• Cap rate: 21.83%
• Cash-on-cash: 55.47%
• DSCR: 3.47
• 1% rule: 2.51%
• Cash to close: $29,400

Investor read

• This is a 2-bed/2.0-bath manufactured listed at $105k. Condition is rated poor.
• At list price, monthly cash flow is $1k ($16k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $105k).
• It's been on market 31 days — a 3% lower offer ($102k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $102k (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $726 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#861 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: crime F, amenities F, cost of living F.
• Palmdale Elementary (suburban): math 20% / reading 31% proficiency, ranked #1,147 of 1,400 in CA (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Palmdale Learning Plaza (783 students, 80% FRL); Cactus Medical Health And Technology Magnet Academy (865 students, 92% FRL); Palmdale High (2,443 students, 74% FRL).
• Market conditions: Rents rising (+1.8%/yr); 410 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 3 sale attempts since 2y ago; this cycle's ask has dropped $25k (19%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $29k cash investment doubles in ~3 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 4→10/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 21.8% vs local median 4.5% in Palmdale — 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 $2,639/mo this rent would consume 51% of the median local household income ($62k/yr) (locally 4384% 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 31 days. Have you received any prior offers? Is the seller open to a 3% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1967 — 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 F-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?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — The siding is visibly damaged
• Major: roof — The roof has visible damage
• Major: interior walls/paint — The condition of the interior walls and paint is not visible but likely poor
• Major: bathrooms — The condition of the bathrooms is not visible but likely poor
• Major: kitchen — The condition of the kitchen is not visible but likely poor
• Major: HVAC/mechanicals — The condition of the HVAC and mechanical systems is not visible but likely poor