515 W 3rd

Long Beach, CA 90802

$5,600,000B-

15 bd · 19.0 ba · 9,468 sqft · Built 1928 · MultiFamily · Active · 13 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $68,384/mo
• Mortgage (P&I): −$29,367
• Tax + insurance: −$4,626
• HOA: −$0
• Vac / Maint / Mgmt: −$14,361
• Net cashflow: $20,030/mo
• Annual: $240,361/yr
• Cap rate: 10.59%
• Cash-on-cash: 15.33%
• DSCR: 1.68
• 1% rule: 1.22%
• Cash to close: $1,568,000

Investor read

• This is a 29 × 4-bed/18.0-bath units multifamily listed at $5.60M.
• At list price, monthly cash flow is $20k ($240k/yr) — positive. Per door: $691/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($68k rent vs $5.60M).
• Only 13 days on market — expect competitive offers; lowballing is unlikely to land.
• Local home prices are declining (-3.0%/yr); year-one equity from $39k of loan paydown is wiped out by about $168k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#319 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment B+; Watch: health & safety C-, crime F, cost of living F.
• Long Beach Unified (urban): math 34% / reading 50% proficiency, ranked #216 of 517 in CA (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1928 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.1%/yr); 207 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.
• 5 sale attempts since 20y 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 $1.35M; list at $5.60M implies a 315% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 1.1% rent growth), your $1.57M cash investment doubles in ~10 years — after that, you're playing with house money.
• Cap rate 10.6% vs local median 1.9% in Long Beach — 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 $68,384/mo this rent would consume 1101% of the median local household income ($75k/yr) (locally 4689% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1928 — 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.
• 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.