218 S Tower Dr

Beverly Hills, CA 90211

$9,900,000C

24 bd · 32.0 ba · 26,972 sqft · Built 1929 · MultiFamily · Active · 48 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $88,899/mo
• Mortgage (P&I): −$51,917
• Tax + insurance: −$8,796
• HOA: −$0
• Vac / Maint / Mgmt: −$18,669
• Net cashflow: $9,518/mo
• Annual: $114,210/yr
• Cap rate: 7.45%
• Cash-on-cash: 4.12%
• DSCR: 1.18
• 1% rule: 0.90%
• Cash to close: $2,772,000

Investor read

• This is a 8 × 3-bed/4.0-bath units multifamily listed at $9.90M.
• At list price, monthly cash flow is $10k ($114k/yr) — positive. Per door: $1k/mo.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $8.89M (10.2% below list).
• It's been on market 48 days — a 3% lower offer ($9.60M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $8.89M (10.2% below list) — sets the bar for 1% rule.
• In year one you build about $1.06M of equity ($68k loan paydown + $990k appreciation (10.0% local appreciation)).
• Location reads 74/100 on livability (#138 in CA, #4,810 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; Watch: housing C-, health & safety C-, crime F.
• Beverly Hills Unified (suburban): math 57% / reading 73% proficiency, ranked #61 of 517 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 7% free/reduced lunch — higher-income household profile.
• Watch-outs: built in 1929 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.9%/yr); 44 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.
• At projected returns (10.0% appreciation + 0.0% rent growth), your $2.77M cash investment doubles in ~3 years — after that, you're playing with house money.
• By year 2, paydown + projected appreciation supports a ~$1.70M cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $88,899/mo this rent would consume 869% of the median local household income ($123k/yr) (locally 824% 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 48 days. Have you received any prior offers? Is the seller open to a 10% 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 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?
• 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.