820 Chestnut Ave

Los Angeles, CA 90042

$2,295,000B+

16 bd · 16.0 ba · 10,492 sqft · Built 1959 · MultiFamily · Pending · 88 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $33,174/mo
• Mortgage (P&I): −$12,035
• Tax + insurance: −$2,610
• HOA: −$0
• Vac / Maint / Mgmt: −$6,967
• Net cashflow: $11,562/mo
• Annual: $138,741/yr
• Cap rate: 12.34%
• Cash-on-cash: 21.59%
• DSCR: 1.96
• 1% rule: 1.45%
• Cash to close: $642,600

Investor read

• This is a 9×1bd/1ba + 3×2bd/1ba + 2×2bd/2ba units multifamily listed at $2.29M.
• At list price, monthly cash flow is $12k ($139k/yr) — positive. Per door: $826/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($33k rent vs $2.29M).
• It's been on market 88 days — a 6% lower offer ($2.16M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.16M (6.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $16k of loan paydown is wiped out by about $69k 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: San Pascual Elem Sci Tech Engr Arts And Math (Steam) Magnet (235 students, 76% FRL); Luther Burbank Middle (904 students, 86% FRL); Valley Academy of Arts And Sciences (math 22% / reading 52%, grade F, #578 of 1,170 statewide, top 51%, 868 students, 64% FRL).
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.3%/yr); 182 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.
• Current owner paid $1.18M; list at $2.29M implies a 95% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 1.3% rent growth), your $643k cash investment doubles in ~7 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 12.3% 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 $33,174/mo this rent would consume 418% of the median local household income ($95k/yr) (locally 2699% 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 88 days. Have you received any prior offers? Is the seller open to a 6% 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 1959 — 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?