501 Palisades Dr #205

Los Angeles, CA 90272

$340,000B

1 bd · 1.0 ba · 593 sqft · Built 1987 · Condo · Active · 158 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,350/mo
• Mortgage (P&I): −$1,783
• Tax + insurance: −$367
• HOA: −$560
• Vac / Maint / Mgmt: −$914
• Net cashflow: $727/mo
• Annual: $8,719/yr
• Cap rate: 9.09%
• Cash-on-cash: 10.00%
• DSCR: 1.44
• 1% rule: 1.28%
• Cash to close: $95,200

Investor read

• This is a 1-bed/1.0-bath condo listed at $340k.
• At list price, monthly cash flow is $727 ($9k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $340k).
• It's been on market 158 days — a 12% lower offer ($299k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $299k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k 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: Marquez Charter (314 students, 14% FRL, charter); Paul Revere Charter Middle (1,718 students, 25% FRL, charter); Valley Academy of Arts And Sciences (math 22% / reading 52%, grade F, #578 of 1,170 statewide, top 51%, 868 students, 64% FRL) — zoned schools average 35% FRL vs 67% district-wide (33 pts lower); this property's tenant base skews higher-income than the district average.
• Watch-outs: flood insurance adds $66/mo.
• Market conditions: Rents rising fast (+7.4%/yr); 323 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 46d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 2 sale attempts; this cycle's ask is 15045% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• At projected returns (-3.0% appreciation + 7.4% rent growth), your $95k cash investment doubles in ~8 years — after that, you're playing with house money.
• Climate carrying-cost: severe flood risk; moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 9.1% 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.

Questions for listing agent

• It's been on market 158 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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 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?