2815 Orchard Pl

South Gate, CA 90280

$1,800,000C

10 bd · 10.0 ba · 5,456 sqft · Built 1929 · MultiFamily · Active · 37 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $18,203/mo
• Mortgage (P&I): −$9,439
• Tax + insurance: −$1,201
• HOA: −$0
• Vac / Maint / Mgmt: −$3,823
• Net cashflow: $3,740/mo
• Annual: $44,883/yr
• Cap rate: 8.79%
• Cash-on-cash: 8.91%
• DSCR: 1.40
• 1% rule: 1.01%
• Cash to close: $504,000

Investor read

• This is a 10 × 1-bed/1-bath units multifamily listed at $1.80M.
• At list price, monthly cash flow is $4k ($45k/yr) — positive. Per door: $374/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($18k rent vs $1.80M).
• It's been on market 37 days — a 3% lower offer ($1.75M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.75M (3.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $12k of loan paydown is wiped out by about $54k of value loss. Plan a longer hold.
• Location reads 63/100 on livability (#459 in CA) — a middle-class / working-renter tenant base. Strengths: commute A+; 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: Willow Elementary (448 students, 95% FRL); Southeast Middle (1,184 students, 96% FRL); South East High (math 30% / reading 68%, grade D, #369 of 1,170 statewide, top 32%, 2,057 students, 94% FRL) — zoned schools average 95% FRL vs 67% district-wide (28 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Watch-outs: built in 1929 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.0%/yr); 52 active listings in the ZIP; 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.
• At projected returns (-3.0% appreciation + 5.0% rent growth), your $504k cash investment doubles in ~10 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.8% vs local median 2.7% in South Gate — 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 $18,203/mo this rent would consume 293% of the median local household income ($75k/yr) (locally 4041% 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 37 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 1929 — 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.