6905 Compton

Florence-Graham, CA 90001

$690,000C

1 bd · 1.0 ba · 440 sqft · Built 1923 · MultiFamily · Active · 179 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,845/mo
• Mortgage (P&I): −$3,618
• Tax + insurance: −$673
• HOA: −$0
• Vac / Maint / Mgmt: −$1,857
• Net cashflow: $2,696/mo
• Annual: $32,358/yr
• Cap rate: 10.98%
• Cash-on-cash: 16.75%
• DSCR: 1.75
• 1% rule: 1.28%
• Cash to close: $193,200

Investor read

• This is a 3 × 3-bed/3.0-bath units multifamily listed at $690k.
• At list price, monthly cash flow is $3k ($32k/yr) — positive. Per door: $899/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $690k).
• It's been on market 179 days — a 12% lower offer ($607k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $607k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $21k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• 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.
• Watch-outs: built in 1923 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 52 active listings in the ZIP; 2 comparable units currently listed for rent nearby; 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.
• 8 sale attempts since 9y 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.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $193k cash investment doubles in ~8 years — after that, you're playing with house money.
• 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 11.0% vs local median 4.4% in Florence-Graham — 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 $8,845/mo this rent would consume 175% of the median local household income ($61k/yr) (locally 2573% 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 179 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 1923 — 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.
• 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.