201 Ocean Ave Unit 1505B

Santa Monica, CA 90402

$785,000D

1 bd · 1.0 ba · 868 sqft · Built 1971 · Condo · Active · 15 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,285/mo
• Mortgage (P&I): −$4,117
• Tax + insurance: −$1,109
• HOA: −$2,238
• Vac / Maint / Mgmt: −$900
• Net cashflow: $-4,078/mo
• Annual: $-48,940/yr
• Cap rate: 0.06%
• Cash-on-cash: -22.27%
• DSCR: 0.01
• 1% rule: 0.55%
• Cash to close: $219,800

Investor read

• This is a 1-bed/1.0-bath condo listed at $785k.
• At list price, monthly cash flow is $-4k ($-49k/yr) — negative.
• To cash-flow at today's rent, offer at most $166k (78.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $429k (45.4% below list).
• It's been on market 15 days — a 2% lower offer ($773k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $166k (78.8% below list) — sets the bar for cash-flow.
• In year one you build about $84k of equity ($5k loan paydown + $78k appreciation (10.0% 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: HOA is 52% of rent.
• Market conditions: Rents rising (+2.0%/yr); 86 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 9 sale attempts since 15y ago; this cycle's ask has dropped $60k (7%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $277k; list at $785k implies a 183% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$135k 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 0.1% vs local median 1.2% in Santa Monica — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• This rent runs 32% of the median local income ($159k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

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?
• Built in 1971 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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?