2327 S Budlong Ave

Los Angeles, CA 90007

$1,850,000B+

None bd · 16.0 ba · 8,062 sqft · Built 1911 · MultiFamily · Active · 170 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $30,414/mo
• Mortgage (P&I): −$9,702
• Tax + insurance: −$2,825
• HOA: −$0
• Vac / Maint / Mgmt: −$6,387
• Net cashflow: $11,501/mo
• Annual: $138,008/yr
• Cap rate: 13.75%
• Cash-on-cash: 26.64%
• DSCR: 2.19
• 1% rule: 1.64%
• Cash to close: $518,000

Investor read

• This is a 16 × 1-bed/1-bath units multifamily listed at $1.85M. Condition is rated good.
• At list price, monthly cash flow is $12k ($138k/yr) — positive. Per door: $719/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($30k rent vs $1.85M).
• It's been on market 170 days — a 12% lower offer ($1.63M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.63M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $13k of loan paydown is wiped out by about $56k 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-, crime F, cost of living 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.
• Zoned schools: Vermont Avenue Elementary (361 students, 96% FRL); West Adams Preparatory High (math 12% / reading 37%, grade F, #826 of 1,170 statewide, top 80%, 1,080 students, 98% FRL) — zoned schools average 97% FRL vs 67% district-wide (30 pts higher); higher-poverty schools than district average — tighter screening recommended.
• Zoned-school proficiency averages 24% at this address vs 42% district-wide (-17 pts) — the specific schools serving this property underperform the Los Angeles Unified average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1911 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.9%/yr); 106 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 43d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; lower-income renter base — watch delinquency; 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.
• 12 sale attempts since 22y 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 $1.27M; 46% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (-3.0% appreciation + 5.9% rent growth), your $518k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: extreme-heat days projected 7→22/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.

Questions for listing agent

• It's been on market 170 days. Have you received any prior offers? Is the seller open to a 12% 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 1911 — 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?