8611 Elm St

Florence-Graham, CA 90002

$625,000C-

4 bd · 3.0 ba · 1,896 sqft · Built 1940 · MultiFamily · Active · 111 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $6,372/mo
• Mortgage (P&I): −$3,278
• Tax + insurance: −$1,118
• HOA: −$0
• Vac / Maint / Mgmt: −$1,338
• Net cashflow: $638/mo
• Annual: $7,661/yr
• Cap rate: 7.52%
• Cash-on-cash: 4.38%
• DSCR: 1.19
• 1% rule: 1.02%
• Cash to close: $175,000

Investor read

• This is a 2×2bd/1ba + 1×1bd/1ba units multifamily listed at $625k.
• At list price, monthly cash flow is $638 ($8k/yr) — positive. Per door: $213/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($6k rent vs $625k).
• It's been on market 111 days — a 9% lower offer ($569k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $569k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $4k of loan paydown is wiped out by about $19k of value loss. Plan a longer hold.
• Location reads: area grade C — affects rentability + tenant quality, not the cash-flow math above.
• 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 1940 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 73 active listings in the ZIP; 33 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 58% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 7 sale attempts since 26y ago; this cycle's ask has dropped $105k (14%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• 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 7.5% vs local median 4.1% in Florence-Graham — 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 $6,372/mo this rent would consume 130% of the median local household income ($59k/yr) (locally 2997% 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 111 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 1940 — 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.
• 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.