8826 Orchard

Los Angeles, CA 90044

$1,189,000B

10 bd · 10.0 ba · 5,398 sqft · Built 1963 · MultiFamily · Active · 66 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $14,140/mo
• Mortgage (P&I): −$6,235
• Tax + insurance: −$1,349
• HOA: −$0
• Vac / Maint / Mgmt: −$2,969
• Net cashflow: $3,587/mo
• Annual: $43,038/yr
• Cap rate: 9.91%
• Cash-on-cash: 12.93%
• DSCR: 1.58
• 1% rule: 1.19%
• Cash to close: $332,920

Investor read

• This is a 5×2bd/1ba + 1×3bd/1ba units multifamily listed at $1.19M.
• At list price, monthly cash flow is $4k ($43k/yr) — positive. Per door: $598/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($14k rent vs $1.19M).
• It's been on market 66 days — a 6% lower offer ($1.12M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.12M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $36k 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 soft (-2.5%/yr); 172 active listings in the ZIP; 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 12y ago; this cycle's ask has dropped $100k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $665k; list at $1.19M implies a 79% gain — meaningful room to come down on a strong offer.
• 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 9.9% 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 $14,140/mo this rent would consume 318% of the median local household income ($53k/yr) (locally 7490% 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 66 days. Have you received any prior offers? Is the seller open to a 6% 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 1963 — 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.
• 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?