23805 Arlington Ave

Torrance, CA 90501

$15,995,000D+

57 bd · 38.0 ba · 26,846 sqft · Built 1964 · MultiFamily · Active · 204 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $140,640/mo
• Mortgage (P&I): −$83,880
• Tax + insurance: −$17,906
• HOA: −$0
• Vac / Maint / Mgmt: −$29,534
• Net cashflow: $9,320/mo
• Annual: $111,837/yr
• Cap rate: 6.99%
• Cash-on-cash: 2.50%
• DSCR: 1.11
• 1% rule: 0.88%
• Cash to close: $4,478,600

Investor read

• This is a 36 × 57-bed/38.0-bath units multifamily listed at $15.99M.
• At list price, monthly cash flow is $9k ($112k/yr) — positive. Per door: $259/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $14.06M (12.1% below list).
• It's been on market 204 days — a 12% lower offer ($14.08M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $14.06M (12.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $111k of loan paydown is wiped out by about $480k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#95 in CA, #3,501 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; Watch: health & safety C-, crime D+, cost of living F.
• Torrance Unified (urban): math 62% / reading 67% proficiency, ranked #150 of 1,400 in CA (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 20% free/reduced lunch — higher-income household profile.
• Market conditions: Rents rising (+3.2%/yr); 96 active listings in the ZIP; solid renter incomes; 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 since 4y 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 $11.30M; 42% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Cap rate 7.0% vs local median 2.1% in Torrance — 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 $140,640/mo this rent would consume 1816% of the median local household income ($93k/yr) (locally 1972% 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 204 days. Have you received any prior offers? Is the seller open to a 12% 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 1964 — 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 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 D 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?