677 Magnolia Ave

Beaumont, CA 92223

$2,400,000B

132 bd · 144.0 ba · 7,089 sqft · Built 1947 · MultiFamily · Active · 281 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $41,800/mo
• Mortgage (P&I): −$12,586
• Tax + insurance: −$4,000
• HOA: −$0
• Vac / Maint / Mgmt: −$8,778
• Net cashflow: $16,436/mo
• Annual: $197,234/yr
• Cap rate: 14.51%
• Cash-on-cash: 29.35%
• DSCR: 2.31
• 1% rule: 1.74%
• Cash to close: $672,000

Investor read

• This is a 12 × 11-bed/12.0-bath units multifamily listed at $2.40M.
• At list price, monthly cash flow is $16k ($197k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($42k rent vs $2.40M).
• It's been on market 281 days — a 12% lower offer ($2.11M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.11M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $72k of value loss. Plan a longer hold.
• Location reads 64/100 on livability (#429 in CA) — a middle-class / working-renter tenant base. Strengths: employment A+, housing A+, crime A-; Watch: amenities F, commute F, cost of living F.
• Beaumont Unified (suburban): math 32% / reading 60% proficiency, ranked #168 of 517 in CA (top 32%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1947 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+3.9%/yr); 276 active listings in the ZIP; solid renter incomes; 9,195 units permitted in Riverside County in 2024 (1,512 in 5+ unit buildings).
• Riverside County population projected at +22% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Current owner paid $90k; list at $2.40M implies a 2552% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 3.9% rent growth), your $672k cash investment doubles in ~4 years — after that, you're playing with house money.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 6→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.5% vs local median 3.5% in Beaumont — 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 $41,800/mo this rent would consume 488% of the median local household income ($103k/yr) (locally 1096% 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 281 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 1947 — 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.