7 Clipper Rd

Rancho Palos Verdes, CA 90275

$2,400,000F

7 bd · 6.0 ba · 4,457 sqft · Built 1962 · MultiFamily · Pending · 84 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $17,431/mo
• Mortgage (P&I): −$12,586
• Tax + insurance: −$1,493
• HOA: −$0
• Vac / Maint / Mgmt: −$3,661
• Net cashflow: $-308/mo
• Annual: $-3,699/yr
• Cap rate: 6.14%
• Cash-on-cash: -0.55%
• DSCR: 0.98
• 1% rule: 0.73%
• Cash to close: $672,000

Investor read

• This is a 4 × 2-bed/?-bath units multifamily listed at $2.40M.
• At list price, monthly cash flow is $-308 ($-4k/yr) — negative. Per door: $-77/mo.
• To cash-flow at today's rent, offer at most $2.35M (2.3% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.74M (27.4% below list).
• It's been on market 84 days — a 6% lower offer ($2.26M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.74M (27.4% below list) — sets the bar for 1% rule.
• 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 58/100 on livability (#685 in CA) — a working-class tenant base; expect higher turnover. Strengths: crime A+, employment A+; Watch: amenities F, commute F, cost of living F.
• Palos Verdes Peninsula Unified (suburban): math 72% / reading 76% proficiency, ranked #51 of 1,400 in CA (top 4%) — strong family-tenant draw, lease renewals of 3-5y typical; only 3% free/reduced lunch — higher-income household profile.
• Zoned schools: Cornerstone At Pedregal Elementary (433 students, 6% FRL); Miraleste Intermediate (math 24% / reading 24%, grade F, #277 of 498 statewide, top 73%, 747 students, 9% FRL); Palos Verdes Peninsula High (2,290 students, 9% FRL).
• Zoned-school proficiency averages 24% at this address vs 74% district-wide (-50 pts) — the specific schools serving this property underperform the Palos Verdes Peninsula Unified average; the district grade overstates school quality for this exact location.
• Market conditions: Rents rising (+1.6%/yr); 163 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.
• 3 sale attempts since 2y ago 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.
• Cap rate 6.1% vs local median 1.8% in Rancho Palos Verdes — 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 $17,431/mo this rent would consume 117% of the median local household income ($179k/yr) (locally 495% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 84 days. Have you received any prior offers? Is the seller open to a 27% 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 1962 — 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.
• Schools are A-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?