1517 Merced #43

South El Monte, CA 91733

$63,000B-

2 bd · 1.0 ba · 810 sqft · Built 1968 · Manufactured · Active · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,235/mo
• Mortgage (P&I): −$330
• Tax + insurance: −$105
• HOA: −$0
• Vac / Maint / Mgmt: −$469
• Net cashflow: $1,330/mo
• Annual: $15,965/yr
• Cap rate: 31.63%
• Cash-on-cash: 90.50%
• DSCR: 5.03
• 1% rule: 3.55%
• Cash to close: $17,640

Investor read

• This is a 2-bed/1.0-bath manufactured listed at $63k. Condition is rated fair.
• At list price, monthly cash flow is $1k ($16k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($2k rent vs $63k).
• It's been on market 27 days — a 2% lower offer ($62k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $62k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $436 of loan paydown is wiped out by about $2k 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, schools D-, crime F.
• 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.
• Market conditions: 55 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals leasing fast (median 2d 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.
• 8 sale attempts since 3y 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 $18k 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 31.6% 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.
• This rent runs 39% of the median local income ($68k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• Built in 1968 — 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.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.

Repairs flagged (vision-AI assessment)

• Major: exterior siding — Significant wear and tear
• Major: roof — No visible photos, but age is unknown
• Minor: flooring — Worn hardwood flooring
• Minor: interior walls/paint — Paint appears faded