217 S Avenue 54

Los Angeles, CA 90042

$3,000,000B-

25 bd · 17.0 ba · 13,223 sqft · Built 1964 · MultiFamily · Pending · 29 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $66,367/mo
• Mortgage (P&I): −$15,732
• Tax + insurance: −$3,099
• HOA: −$0
• Vac / Maint / Mgmt: −$13,937
• Net cashflow: $33,599/mo
• Annual: $403,188/yr
• Cap rate: 19.73%
• Cash-on-cash: 48.00%
• DSCR: 3.14
• 1% rule: 2.21%
• Cash to close: $840,000

Investor read

• This is a 17 × 25-bed/17.0-bath units multifamily listed at $3.00M.
• At list price, monthly cash flow is $34k ($403k/yr) — positive. Per door: $2k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($66k rent vs $3.00M).
• It's been on market 29 days — a 2% lower offer ($2.96M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.96M (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $21k of loan paydown is wiped out by about $90k 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-, schools D+, crime 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.
• Market conditions: Rents rising (+1.3%/yr); 180 active listings in the ZIP; solid renter incomes; 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.
• 3 sale attempts since 26y 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 $1.30M; list at $3.00M implies a 131% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 1.3% rent growth), your $840k cash investment doubles in ~3 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 19.7% 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 $66,367/mo this rent would consume 836% of the median local household income ($95k/yr) (locally 2699% 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 1964 — 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?
• 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.