807 Waterloo St

Los Angeles, CA 90026

$3,025,000D

2 bd · 2.0 ba · 2,058 sqft · Built 1912 · MultiFamily · Active · 91 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $347,333/mo
• Mortgage (P&I): −$15,863
• Tax + insurance: −$2,400
• HOA: −$0
• Vac / Maint / Mgmt: −$72,940
• Net cashflow: $256,130/mo
• Annual: $3,073,559/yr
• Cap rate: 107.90%
• Cash-on-cash: 362.88%
• DSCR: 17.15
• 1% rule: 11.48%
• Cash to close: $847,000

Investor read

• This is a 2-bed/2.0-bath multifamily listed at $3.02M.
• At list price, monthly cash flow is $256k ($3.07M/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($347k rent vs $3.02M).
• It's been on market 91 days — a 9% lower offer ($2.75M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.75M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $21k of loan paydown is wiped out by about $91k of value loss. Plan a longer hold.
• Location reads 68/100 on livability (#273 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment B; Watch: health & safety C-, schools D+, crime F.
• Los Angeles Unified (urban): math 29% / reading 54% proficiency, ranked #223 of 517 in CA (top 43%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 67% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1912 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-0.0%/yr); 179 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 22d on market — plan ~3-4 weeks tenant-placement turnaround); 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.
• 3 sale attempts since 3y ago; this cycle's ask has dropped $270k (8%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $2k; list at $3.02M implies a 120900% gain — meaningful room to come down on a strong offer.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $847k cash investment doubles in ~1 year — after that, you're playing with house money.
• 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.
• Cap rate 107.9% vs local median 2.1% in Los Angeles — 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 $347,333/mo this rent would consume 4772% of the median local household income ($87k/yr) (locally 4974% 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 91 days. Have you received any prior offers? Is the seller open to a 9% concession, seller financing, or rate buy-down credit?
• Built in 1912 — 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?
• 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.