5110 Compton Ave

Los Angeles, CA 90011

$899,000C+

8 bd · 5.0 ba · 3,692 sqft · Built 1961 · MultiFamily · Active · 567 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $10,760/mo
• Mortgage (P&I): −$4,714
• Tax + insurance: −$1,286
• HOA: −$0
• Vac / Maint / Mgmt: −$2,260
• Net cashflow: $2,500/mo
• Annual: $30,000/yr
• Cap rate: 9.63%
• Cash-on-cash: 11.92%
• DSCR: 1.53
• 1% rule: 1.20%
• Cash to close: $251,720

Investor read

• This is a 4×2bd/1ba + 1×1bd/1ba units multifamily listed at $899k.
• At list price, monthly cash flow is $2k ($30k/yr) — positive. Per door: $500/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($11k rent vs $899k).
• It's been on market 567 days — a 12% lower offer ($791k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $791k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $27k 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: Hooper Avenue Elementary (712 students, 98% FRL); Los Angeles Academy Middle (976 students, 98% FRL); Santee Education Complex (math 17% / reading 47%, grade F, #674 of 1,170 statewide, top 59%, 1,753 students, 98% FRL) — zoned schools average 98% FRL vs 67% district-wide (31 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents falling (-8.2%/yr); 125 active listings in the ZIP; 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.
• 9 sale attempts since 26y ago; this cycle's ask has dropped $51k (5%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $779k; 15% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.6% 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 $10,760/mo this rent would consume 219% of the median local household income ($59k/yr) (locally 5930% 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 567 days. Have you received any prior offers? Is the seller open to a 12% 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 1961 — 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?