1217 9th St

Santa Monica, CA 90401

$5,100,000D

10 bd · 10.0 ba · 3,600 sqft · Built 1924 · MultiFamily · Active · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $37,218/mo
• Mortgage (P&I): −$26,745
• Tax + insurance: −$5,317
• HOA: −$0
• Vac / Maint / Mgmt: −$7,816
• Net cashflow: $-2,660/mo
• Annual: $-31,919/yr
• Cap rate: 5.67%
• Cash-on-cash: -2.24%
• DSCR: 0.90
• 1% rule: 0.73%
• Cash to close: $1,428,000

Investor read

• This is a 13 × 1-bed/?-bath units multifamily listed at $5.10M.
• At list price, monthly cash flow is $-3k ($-32k/yr) — negative. Per door: $-205/mo.
• To cash-flow at today's rent, offer at most $4.63M (9.2% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $3.72M (27.0% below list).
• It's been on market 27 days — a 2% lower offer ($5.02M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.72M (27.0% below list) — sets the bar for 1% rule.
• In year one you build about $110k of equity ($35k loan paydown + $75k appreciation (1.5% local appreciation)).
• Location reads 72/100 on livability (#178 in CA) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; Watch: health & safety C-, crime F, cost of living 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: built in 1924 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents falling (-4.1%/yr); 27 active listings in the ZIP; 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.
• 6 sale attempts since 7y 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 $2.80M; list at $5.10M implies a 82% gain — meaningful room to come down on a strong offer.
• By year 4, paydown + projected appreciation supports a ~$387k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• 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 5.7% vs local median 1.2% in Santa Monica — 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 $37,218/mo this rent would consume 405% of the median local household income ($110k/yr) (locally 1039% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• 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 1924 — 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 A-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?