20910 Pacific Coast Hwy

Malibu, CA 90265

$2,895,000F

2 bd · 2.0 ba · 1,514 sqft · Built 1923 · MultiFamily · Active · 26 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $16,716/mo
• Mortgage (P&I): −$15,182
• Tax + insurance: −$2,899
• HOA: −$0
• Vac / Maint / Mgmt: −$3,510
• Net cashflow: $-4,875/mo
• Annual: $-58,497/yr
• Cap rate: 4.27%
• Cash-on-cash: -7.22%
• DSCR: 0.68
• 1% rule: 0.58%
• Cash to close: $810,600

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $2.90M.
• At list price, monthly cash flow is $-5k ($-58k/yr) — negative.
• To cash-flow at today's rent, offer at most $2.03M (29.7% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.67M (42.3% below list).
• It's been on market 26 days — a 2% lower offer ($2.85M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.67M (42.3% below list) — sets the bar for 1% rule.
• In year one you build about $38k of equity ($20k loan paydown + $18k appreciation (0.6% local appreciation)).
• Location reads 53/100 on livability (#979 in CA) — a working-class tenant base; expect higher turnover. Strengths: employment A+; Watch: housing C-, crime F, amenities F.
• Santa Monica-Malibu Unified (urban): math 61% / reading 74% proficiency, ranked #123 of 1,400 in CA (top 9%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Webster Elementary (214 students, 10% FRL).
• Watch-outs: built in 1923 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents falling (-3.4%/yr); 640 active listings in the ZIP; 6 comparable units currently listed for rent nearby; rentals lingering (median 47d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 2 sale attempts since 24y 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.
• Current owner paid $1.79M; list at $2.90M implies a 61% gain — meaningful room to come down on a strong offer.
• By year 5, paydown + projected appreciation supports a ~$185k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 4.3% vs local median 0.7% in Malibu — 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.

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?
• Built in 1923 — 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 B-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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• 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.