1517 Merced Ave #44

South El Monte, CA 91733

$110,000B-

3 bd · 1.0 ba · 1,440 sqft · Built 1964 · Manufactured · Active · 68 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,789/mo
• Mortgage (P&I): −$577
• Tax + insurance: −$183
• HOA: −$0
• Vac / Maint / Mgmt: −$796
• Net cashflow: $2,233/mo
• Annual: $26,801/yr
• Cap rate: 30.66%
• Cash-on-cash: 87.02%
• DSCR: 4.87
• 1% rule: 3.44%
• Cash to close: $30,800

Investor read

• This is a 3-bed/1.0-bath manufactured listed at $110k.
• At list price, monthly cash flow is $2k ($27k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($4k rent vs $110k).
• It's been on market 68 days — a 6% lower offer ($103k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $103k (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $761 of loan paydown is wiped out by about $3k of value loss. Plan a longer hold.
• Location reads 62/100 on livability (#488 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+; Watch: health & safety D, crime F, amenities D-.
• El Monte Union High (suburban): math 34% / reading 59% proficiency, ranked #543 of 1,400 in CA (top 39%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: New Temple (560 students, 64% FRL); Dean L. Shively (330 students, 68% FRL); South El Monte High (1,300 students, 86% FRL).
• Market conditions: 57 active listings in the ZIP; 5 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.
• 4 sale attempts since 15y 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.
• Current owner paid $18k; list at $110k implies a 511% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.0% rent growth), your $31k cash investment doubles in ~2 years — after that, you're playing with house money.
• 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 30.7% vs local median 2.6% in South El Monte — 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 $3,789/mo this rent would consume 67% of the median local household income ($68k/yr) (locally 2017% 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 68 days. Have you received any prior offers? Is the seller open to a 6% concession, seller financing, or rate buy-down credit?
• Built in 1964 — 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?
• 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.