313 W Magnolia

Compton, CA 90220

$849,000C

8 bd · 4.0 ba · 3,282 sqft · Built 1945 · MultiFamily · Active · 112 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $9,084/mo
• Mortgage (P&I): −$4,452
• Tax + insurance: −$1,014
• HOA: −$0
• Vac / Maint / Mgmt: −$1,908
• Net cashflow: $1,710/mo
• Annual: $20,523/yr
• Cap rate: 8.71%
• Cash-on-cash: 8.63%
• DSCR: 1.38
• 1% rule: 1.07%
• Cash to close: $237,720

Investor read

• This is a 4 × 2-bed/1.0-bath units multifamily listed at $849k.
• At list price, monthly cash flow is $2k ($21k/yr) — positive. Per door: $428/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($9k rent vs $849k).
• It's been on market 112 days — a 9% lower offer ($773k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $773k (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $6k of loan paydown is wiped out by about $25k of value loss. Plan a longer hold.
• Location reads 56/100 on livability (#803 in CA) — a working-class tenant base; expect higher turnover. Strengths: commute A+, housing B; Watch: schools D, crime F, amenities D-.
• Compton Unified (suburban): math 31% / reading 38% proficiency, ranked #910 of 1,400 in CA (top 65%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 78% free/reduced lunch — lower-income household profile, screen leases tightly.
• Watch-outs: built in 1945 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 71 active listings in the ZIP; 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.
• 12 sale attempts since 30y 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 $340k; list at $849k implies a 150% gain — meaningful room to come down on a strong offer.
• 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 8.7% vs local median 3.0% in Compton — 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 $9,084/mo this rent would consume 132% of the median local household income ($82k/yr) (locally 1473% 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 112 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 1945 — 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?