3945 Frances Ave

Los Angeles, CA 90066

$3,350,000B-

17 bd · 17.0 ba · 9,165 sqft · Built 1963 · MultiFamily · Pending · 44 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $40,195/mo
• Mortgage (P&I): −$17,568
• Tax + insurance: −$3,166
• HOA: −$0
• Vac / Maint / Mgmt: −$8,441
• Net cashflow: $11,021/mo
• Annual: $132,249/yr
• Cap rate: 10.24%
• Cash-on-cash: 14.10%
• DSCR: 1.63
• 1% rule: 1.20%
• Cash to close: $938,000

Investor read

• This is a 19 × 1-bed/1.0-bath units multifamily listed at $3.35M.
• At list price, monthly cash flow is $11k ($132k/yr) — positive. Per door: $580/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($40k rent vs $3.35M).
• It's been on market 44 days — a 3% lower offer ($3.25M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.25M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $23k of loan paydown is wiped out by about $100k 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.
• Market conditions: Rents soft (-0.1%/yr); 159 active listings in the ZIP; 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.
• Current owner paid $840k; list at $3.35M implies a 299% gain — meaningful room to come down on a strong offer.
• 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 10.2% 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 $40,195/mo this rent would consume 423% of the median local household income ($114k/yr) (locally 3174% 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 44 days. Have you received any prior offers? Is the seller open to a 3% 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 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 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?
• 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.