1218 Armacost Ave

Los Angeles, CA 90025

$4,299,000C

14 bd · 13.0 ba · 6,511 sqft · Built 1956 · MultiFamily · Active · 98 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $49,138/mo
• Mortgage (P&I): −$22,544
• Tax + insurance: −$4,015
• HOA: −$0
• Vac / Maint / Mgmt: −$10,319
• Net cashflow: $12,260/mo
• Annual: $147,117/yr
• Cap rate: 9.72%
• Cash-on-cash: 12.22%
• DSCR: 1.54
• 1% rule: 1.14%
• Cash to close: $1,203,720

Investor read

• This is a 13 × 14-bed/13.0-bath units multifamily listed at $4.30M.
• At list price, monthly cash flow is $12k ($147k/yr) — positive. Per door: $943/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($49k rent vs $4.30M).
• It's been on market 98 days — a 9% lower offer ($3.91M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.91M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-1.0%/yr); year-one equity from $30k of loan paydown is wiped out by about $44k 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-, schools D+, crime 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.
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.4%/yr); 153 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.
• 4 sale attempts since 25y 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 $1.44M; list at $4.30M implies a 199% gain — meaningful room to come down on a strong offer.
• At projected returns (-1.0% appreciation + 0.0% rent growth), your $1.20M cash investment doubles in ~9 years — after that, you're playing with house money.
• 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 9.7% 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 $49,138/mo this rent would consume 568% of the median local household income ($104k/yr) (locally 4925% 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 98 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?
• Built in 1956 — 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 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?