16925 Prairie

Torrance, CA 90504

$6,500,000D

28 bd · 27.0 ba · 10,626 sqft · Built 1964 · MultiFamily · Active · 143 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $53,962/mo
• Mortgage (P&I): −$34,087
• Tax + insurance: −$9,237
• HOA: −$0
• Vac / Maint / Mgmt: −$11,332
• Net cashflow: $-694/mo
• Annual: $-8,324/yr
• Cap rate: 6.16%
• Cash-on-cash: -0.46%
• DSCR: 0.98
• 1% rule: 0.83%
• Cash to close: $1,820,000

Investor read

• This is a 28-bed/27.0-bath multifamily listed at $6.50M.
• At list price, monthly cash flow is $-694 ($-8k/yr) — negative.
• To cash-flow at today's rent, offer at most $6.38M (1.9% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $5.40M (17.0% below list).
• It's been on market 143 days — a 12% lower offer ($5.72M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $5.40M (17.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $45k of loan paydown is wiped out by about $195k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#95 in CA, #3,501 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: health & safety C-, crime D+, cost of living F.
• Torrance Unified (urban): math 62% / reading 67% proficiency, ranked #150 of 1,400 in CA (top 11%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 20% free/reduced lunch — higher-income household profile.
• Zoned schools: Evelyn Carr Elementary (386 students, 46% FRL); Philip Magruder Middle (534 students, 48% FRL); North High (1,791 students, 36% FRL) — zoned schools average 43% FRL vs 20% district-wide (23 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Market conditions: Rents rising (+2.3%/yr); 34 active listings in the ZIP; solid renter incomes; 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 11y ago; this cycle's ask has dropped $700k (10%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Cap rate 6.2% vs local median 2.1% in Torrance — 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 $53,962/mo this rent would consume 602% of the median local household income ($108k/yr) (locally 1335% 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 143 days. Have you received any prior offers? Is the seller open to a 17% concession, seller financing, or rate buy-down credit?
• Built in 1964 — 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?
• Crime grade is D 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?