20314 Pacific Coast Hwy

Malibu, CA 90265

$1,995,000B

3 bd · 3.0 ba · 1,680 sqft · Built 1950 · MultiFamily · Active · 6 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $25,101/mo
• Mortgage (P&I): −$10,462
• Tax + insurance: −$2,132
• HOA: −$0
• Vac / Maint / Mgmt: −$5,271
• Net cashflow: $7,236/mo
• Annual: $86,831/yr
• Cap rate: 11.05%
• Cash-on-cash: 16.98%
• DSCR: 1.76
• 1% rule: 1.26%
• Cash to close: $558,600

Investor read

• This is a 3-bed/3.0-bath multifamily listed at $2.00M.
• At list price, monthly cash flow is $7k ($87k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($25k rent vs $2.00M).
• Only 6 days on market — expect competitive offers; lowballing is unlikely to land.
• In year one you build about $26k of equity ($14k loan paydown + $12k appreciation (0.6% local appreciation)).
• Location reads 53/100 on livability (#979 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+, schools B; Watch: housing C-, crime F, amenities F.
• Santa Monica-Malibu Unified (urban): math 61% / reading 74% proficiency, ranked #123 of 1,400 in CA (top 9%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: flood insurance adds $669/mo; built in 1950 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents falling (-3.4%/yr); 636 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 71% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 2 sale attempts 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 (0.6% appreciation + 0.0% rent growth), your $559k cash investment doubles in ~5 years — after that, you're playing with house money.
• By year 5, paydown + projected appreciation supports a ~$127k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone VE (mandatory federal flood insurance); moderate wildfire risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 11.0% vs local median 0.7% in Malibu — 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 $25,101/mo this rent would consume 153% of the median local household income ($197k/yr) (locally 420% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Built in 1950 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.