1677 N Lake Ave

Pasadena, CA 91104

$2,975,000C-

16 bd · 12.0 ba · 9,118 sqft · Built 1959 · MultiFamily · Active · 106 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $26,627/mo
• Mortgage (P&I): −$15,601
• Tax + insurance: −$4,958
• HOA: −$0
• Vac / Maint / Mgmt: −$5,592
• Net cashflow: $476/mo
• Annual: $5,709/yr
• Cap rate: 6.48%
• Cash-on-cash: 0.69%
• DSCR: 1.03
• 1% rule: 0.90%
• Cash to close: $833,000

Investor read

• This is a 5 × 3-bed/?-bath units multifamily listed at $2.98M.
• At list price, monthly cash flow is $476 ($6k/yr) — positive. Per door: $95/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 $2.66M (10.5% below list).
• It's been on market 106 days — a 9% lower offer ($2.71M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.66M (10.5% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $21k of loan paydown is wiped out by about $89k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#181 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment A+; Watch: schools D+, health & safety D+, crime F.
• Pasadena Unified (urban): math 42% / reading 60% proficiency, ranked #123 of 517 in CA (top 24%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1959 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.6%/yr); 44 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.
• Climate carrying-cost: extreme-heat days projected 7→19/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.5% vs local median 1.5% in Pasadena — 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 $26,627/mo this rent would consume 302% of the median local household income ($106k/yr) (locally 1486% 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 106 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 1959 — 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 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?