517-1/2 Larkspur

Newport Beach, CA 92625

$1,995,000D

2 bd · 3.0 ba · 1,202 sqft · Built 2000 · Condo · Active · 88 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,677/mo
• Mortgage (P&I): −$10,462
• Tax + insurance: −$1,856
• HOA: −$0
• Vac / Maint / Mgmt: −$1,822
• Net cashflow: $-5,463/mo
• Annual: $-65,554/yr
• Cap rate: 3.01%
• Cash-on-cash: -11.74%
• DSCR: 0.48
• 1% rule: 0.43%
• Cash to close: $558,600

Investor read

• This is a 2-bed/3.0-bath condo listed at $2.00M.
• At list price, monthly cash flow is $-5k ($-66k/yr) — negative.
• To cash-flow at today's rent, offer at most $1.03M (48.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $868k (56.5% below list).
• It's been on market 88 days — a 6% lower offer ($1.88M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $868k (56.5% below list) — sets the bar for 1% rule.
• In year one you build about $213k of equity ($14k loan paydown + $200k appreciation (10.0% local appreciation)).
• Location reads 76/100 on livability (#101 in CA, #3,645 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, employment A+, commute A; Watch: health & safety C-, cost of living F.
• Newport-Mesa Unified (urban): math 46% / reading 58% proficiency, ranked #106 of 517 in CA (top 20%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Zoned schools: Harbor View Elementary (math 67%, 295 students, 12% FRL); Corona Del Mar High (math 55% / reading 63%, grade C+, #221 of 1,170 statewide, top 19%, 2,059 students, 20% FRL) — zoned schools average 16% FRL vs 40% district-wide (24 pts lower); this property's tenant base skews higher-income than the district average.
• Market conditions: Rents rising fast (+12.4%/yr); 91 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 27d on market — plan ~3-4 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; high-income renter base; 6,974 units permitted in Orange County in 2024 (3,839 in 5+ unit buildings).
• Orange County population projected at +14% by 2050 — modest demand growth; plan on rents tracking national, not racing it.
• Current owner paid $815k; list at $2.00M implies a 145% gain — meaningful room to come down on a strong offer.
• By year 2, paydown + projected appreciation supports a ~$343k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: extreme-heat days projected 7→23/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 3.0% vs local median 0.6% in Newport Beach — 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 $8,677/mo this rent would consume 60% of the median local household income ($175k/yr) (locally 767% 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?
• It's been on market 88 days. Have you received any prior offers? Is the seller open to a 57% concession, seller financing, or rate buy-down credit?
• Any open or pending special assessments — roof, HVAC, plumbing, elevator, façade? What's the per-unit balance and payoff schedule, and is the seller paying it off at close or rolling it to the buyer?
• 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 A-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?
• 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.