5836 Lexington Ave

Los Angeles, CA 90038

$1,390,000C

9 bd · 8.1 ba · 6,026 sqft · Built 1956 · MultiFamily · Active · 94 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,352/mo
• Mortgage (P&I): −$7,289
• Tax + insurance: −$2,317
• HOA: −$0
• Vac / Maint / Mgmt: −$2,804
• Net cashflow: $942/mo
• Annual: $11,305/yr
• Cap rate: 7.11%
• Cash-on-cash: 2.90%
• DSCR: 1.13
• 1% rule: 0.96%
• Cash to close: $389,200

Investor read

• This is a 3 × 3-bed/?-bath units multifamily listed at $1.39M. Condition is rated good.
• At list price, monthly cash flow is $942 ($11k/yr) — positive. Per door: $314/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 $1.34M (3.9% below list).
• It's been on market 94 days — a 9% lower offer ($1.26M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $1.26M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $10k of loan paydown is wiped out by about $42k 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: Joseph Le Conte Middle (659 students, 94% FRL); Valley Academy of Arts And Sciences (math 22% / reading 52%, grade F, #578 of 1,170 statewide, top 51%, 868 students, 64% FRL).
• Watch-outs: built in 1956 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 131 active listings in the ZIP; 9 comparable units currently listed for rent nearby; rentals lingering (median 61d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 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 29y 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.
• 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.
• Cap rate 7.1% vs local median 2.2% 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 $4,451/mo per unit this rent would consume 87% of the median local household income ($61k/yr) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• It's been on market 94 days. Have you received any prior offers? Is the seller open to a 9% 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 1956 — 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?