25260 Malibu Rd

Malibu, CA 90265

$8,500,000F

4 bd · 4.0 ba · 2,400 sqft · Built 1954 · MultiFamily · Active · 21 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $33,873/mo
• Mortgage (P&I): −$44,575
• Tax + insurance: −$12,253
• HOA: −$0
• Vac / Maint / Mgmt: −$7,113
• Net cashflow: $-30,068/mo
• Annual: $-360,815/yr
• Cap rate: 2.14%
• Cash-on-cash: -14.82%
• DSCR: 0.34
• 1% rule: 0.40%
• Cash to close: $2,380,000

Investor read

• This is a 4-bed/4.0-bath multifamily listed at $8.50M.
• At list price, monthly cash flow is $-30k ($-361k/yr) — negative.
• To cash-flow at today's rent, offer at most $3.19M (62.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $3.39M (60.1% below list).
• It's been on market 21 days — a 2% lower offer ($8.37M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.19M (62.5% below list) — sets the bar for cash-flow.
• In year one you build about $111k of equity ($59k loan paydown + $53k 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+, schools B; 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.
• Watch-outs: flood insurance adds $669/mo; built in 1954 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents falling (-3.4%/yr); 627 active listings in the ZIP; 7 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 86% 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.
• 6 sale attempts since 13y 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 $7.30M; 16% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• By year 5, paydown + projected appreciation supports a ~$543k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: in FEMA flood zone VE (mandatory federal flood insurance) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.1% 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.
• At $33,873/mo this rent would consume 207% of the median local household income ($197k/yr) (locally 420% 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?
• Built in 1954 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• 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.