544 E Rue Royale

Covina, CA 91723

$2,388,000C+

None bd · None ba · — sqft · Built — · MultiFamily · Active · 187 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $29,247/mo
• Mortgage (P&I): −$12,523
• Tax + insurance: −$3,980
• HOA: −$0
• Vac / Maint / Mgmt: −$6,142
• Net cashflow: $6,602/mo
• Annual: $79,226/yr
• Cap rate: 9.61%
• Cash-on-cash: 11.85%
• DSCR: 1.53
• 1% rule: 1.22%
• Cash to close: $668,640

Investor read

• This is a multifamily listed at $2.39M. Condition is rated poor.
• At list price, monthly cash flow is $7k ($79k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($29k rent vs $2.39M).
• It's been on market 187 days — a 12% lower offer ($2.10M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.10M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $17k of loan paydown is wiped out by about $72k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#181 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: crime C-, health & safety C-, cost of living F.
• Covina-Valley Unified (suburban): math 39% / reading 55% proficiency, ranked #462 of 1,400 in CA (top 33%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Zoned schools: Ben Lomond Elementary (420 students, 70% FRL); Sierra Vista Middle (770 students, 64% FRL); South Hills High (1,640 students, 53% FRL).
• Market conditions: Rents rising fast (+7.2%/yr); 31 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 19d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 3 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.
• Current owner paid $675k; list at $2.39M implies a 254% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 7.2% rent growth), your $669k cash investment doubles in ~7 years — after that, you're playing with house money.
• Cap rate 9.6% vs local median 2.3% in Covina — 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 $29,247/mo this rent would consume 373% of the median local household income ($94k/yr) (locally 792% 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 187 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• Have any recent inspections been done? Can we get a copy of the seller's disclosures and any deferred-maintenance estimates?
• 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.
• 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.

Repairs flagged (vision-AI assessment)

• Major: roof — No visible roof
• Major: exterior siding — No visible exterior siding
• Major: interior walls — No visible interior walls