2322 Palos Verdes Dr W #206

Palos Verdes Estates, CA 90274

$799,000D-

2 bd · 2.0 ba · 1,169 sqft · Built 1973 · Condo · Active · 49 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $4,848/mo
• Mortgage (P&I): −$4,190
• Tax + insurance: −$822
• HOA: −$496
• Vac / Maint / Mgmt: −$1,018
• Net cashflow: $-1,678/mo
• Annual: $-20,137/yr
• Cap rate: 3.77%
• Cash-on-cash: -9.00%
• DSCR: 0.60
• 1% rule: 0.61%
• Cash to close: $223,720

Investor read

• This is a 2-bed/2.0-bath condo listed at $799k.
• At list price, monthly cash flow is $-2k ($-20k/yr) — negative.
• To cash-flow at today's rent, offer at most $503k (37.1% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $485k (39.3% below list).
• It's been on market 49 days — a 3% lower offer ($775k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $485k (39.3% below list) — sets the bar for 1% rule.
• In year one you build about $6k of equity ($6k loan paydown + $409 appreciation (0.1% local appreciation)).
• Location reads 68/100 on livability (#271 in CA) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+; Watch: commute C-, amenities F, cost of living F.
• Palos Verdes Peninsula Unified (suburban): math 72% / reading 76% proficiency, ranked #51 of 1,400 in CA (top 4%) — strong family-tenant draw, lease renewals of 3-5y typical; only 3% free/reduced lunch — higher-income household profile.
• Zoned schools: Cornerstone At Pedregal Elementary (433 students, 6% FRL); Palos Verdes Intermediate (700 students, 8% FRL); Palos Verdes Peninsula High (2,290 students, 9% FRL) — zoned schools at 8% FRL track the district average.
• Market conditions: Rents rising (+1.8%/yr); 130 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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.
• 4 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 $225k; list at $799k implies a 255% gain — meaningful room to come down on a strong offer.
• By year 7, paydown + projected appreciation supports a ~$51k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Cap rate 3.8% vs local median 1.1% in Palos Verdes Estates — 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.

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 49 days. Have you received any prior offers? Is the seller open to a 39% concession, seller financing, or rate buy-down credit?
• Built in 1973 — 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?
• 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?