2039 W Florence

Los Angeles, CA 90047

$675,000D

4 bd · 3.0 ba · 2,090 sqft · Built 2005 · SingleFamily · Active · 96 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,787/mo
• Mortgage (P&I): −$3,540
• Tax + insurance: −$770
• HOA: −$0
• Vac / Maint / Mgmt: −$1,005
• Net cashflow: $-528/mo
• Annual: $-6,339/yr
• Cap rate: 5.35%
• Cash-on-cash: -3.35%
• DSCR: 0.85
• 1% rule: 0.71%
• Cash to close: $189,000

Investor read

• This is a 4-bed/3.0-bath single-family listed at $675k.
• At list price, monthly cash flow is $-528 ($-6k/yr) — negative.
• To cash-flow at today's rent, offer at most $582k (13.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $479k (29.1% below list).
• It's been on market 96 days — a 9% lower offer ($614k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $479k (29.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $5k of loan paydown is wiped out by about $20k 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-, crime F, cost of living 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.
• Zoned schools: Seventy-Fourth Street Elementary (362 students, 91% FRL); Valley Academy of Arts And Sciences (math 22% / reading 52%, grade F, #578 of 1,170 statewide, top 51%, 868 students, 64% FRL).
• Market conditions: Rents rising fast (+5.5%/yr); 138 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 46% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 3 sale attempts since 20y ago; this cycle's ask has dropped $84k (11%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $555k; 22% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• Climate carrying-cost: extreme-heat days projected 6→18/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 5.4% 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 $4,787/mo this rent would consume 80% of the median local household income ($72k/yr) (locally 3323% 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?
• It's been on market 96 days. Have you received any prior offers? Is the seller open to a 29% concession, seller financing, or rate buy-down credit?
• 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?
• 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?
• 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.