12718 Mitchell Ave

Los Angeles, CA 90066

$2,725,000D+

11 bd · 11.0 ba · 7,935 sqft · Built 1971 · MultiFamily · Active · 17 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $27,034/mo
• Mortgage (P&I): −$14,290
• Tax + insurance: −$4,302
• HOA: −$0
• Vac / Maint / Mgmt: −$5,677
• Net cashflow: $2,765/mo
• Annual: $33,182/yr
• Cap rate: 7.51%
• Cash-on-cash: 4.35%
• DSCR: 1.19
• 1% rule: 0.99%
• Cash to close: $763,000

Investor read

• This is a 7×1bd/1.0ba + 2×2bd/2.0ba units multifamily listed at $2.73M.
• At list price, monthly cash flow is $3k ($33k/yr) — positive. Per door: $307/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $2.70M (0.8% below list).
• It's been on market 17 days — a 2% lower offer ($2.68M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.68M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $19k of loan paydown is wiped out by about $82k 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: Grand View Boulevard Elementary (541 students, 60% FRL); Mark Twain Middle (896 students, 55% FRL); Venice Senior High (math 33% / reading 64%, grade D, #373 of 1,170 statewide, top 32%, 2,107 students, 69% FRL).
• Market conditions: Rents soft (-0.1%/yr); 158 active listings in the ZIP; 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.
• 4 sale attempts since 8y 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.
• 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 7.5% 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 $27,034/mo this rent would consume 284% of the median local household income ($114k/yr) (locally 3174% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1971 — 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 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.