637 W Altadena Dr

Altadena, CA 91001

$1,095,000C

5 bd · 3.0 ba · 2,895 sqft · Built 1963 · MultiFamily · Active · 19 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,842/mo
• Mortgage (P&I): −$5,742
• Tax + insurance: −$709
• HOA: −$0
• Vac / Maint / Mgmt: −$2,067
• Net cashflow: $1,324/mo
• Annual: $15,884/yr
• Cap rate: 7.74%
• Cash-on-cash: 5.18%
• DSCR: 1.23
• 1% rule: 0.90%
• Cash to close: $306,600

Investor read

• This is a 2×2bd/1ba + 1×1bd/1ba units multifamily listed at $1.09M.
• At list price, monthly cash flow is $1k ($16k/yr) — positive. Per door: $441/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $984k (10.1% below list).
• It's been on market 19 days — a 2% lower offer ($1.08M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $984k (10.1% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $8k of loan paydown is wiped out by about $33k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#179 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+, employment A+, crime A-; Watch: health & safety D, amenities F, cost of living F.
• Pasadena Unified (urban): math 42% / reading 60% proficiency, ranked #123 of 517 in CA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Market conditions: Rents rising (+2.8%/yr); 113 active listings in the ZIP; 8 comparable units currently listed for rent nearby; rentals leasing fast (median 11d on market — plan ~1-2 weeks tenant-placement turnaround); 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 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.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 8→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.7% vs local median 1.8% in Altadena — 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 $9,842/mo this rent would consume 88% of the median local household income ($135k/yr) (locally 733% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• 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 1963 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-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?
• 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.
• How much new apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.