12617 Eucalyptus Ave

Hawthorne, CA 90250

$3,450,000C

15 bd · 15.0 ba · 10,366 sqft · Built 1986 · MultiFamily · Active · 106 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $38,878/mo
• Mortgage (P&I): −$18,092
• Tax + insurance: −$5,202
• HOA: −$0
• Vac / Maint / Mgmt: −$8,164
• Net cashflow: $7,419/mo
• Annual: $89,029/yr
• Cap rate: 8.87%
• Cash-on-cash: 9.22%
• DSCR: 1.41
• 1% rule: 1.13%
• Cash to close: $966,000

Investor read

• This is a 15 × 3.0-bed/1.5-bath units multifamily listed at $3.45M.
• At list price, monthly cash flow is $7k ($89k/yr) — positive. Per door: $495/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($39k rent vs $3.45M).
• It's been on market 106 days — a 9% lower offer ($3.14M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.14M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $24k of loan paydown is wiped out by about $104k of value loss. Plan a longer hold.
• Location reads 60/100 on livability (#597 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, housing B; Watch: crime F, cost of living F, health & safety F.
• Hawthorne (suburban): math 38% / reading 47% proficiency, ranked #673 of 1,400 in CA (top 48%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+1.9%/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.
• 6 sale attempts since 15y ago; this cycle's ask is 183900% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Current owner paid $2.90M; 19% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• 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 8.9% vs local median 2.0% in Hawthorne — 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 $38,878/mo this rent would consume 596% of the median local household income ($78k/yr) (locally 6620% 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 106 days. Have you received any prior offers? Is the seller open to a 9% 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?
• 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.
• 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.