1229 N Fairfax Ave

West Hollywood, CA 90046

$4,500,000B-

396 bd · 2.0 ba · 900 sqft · Built 1923 · MultiFamily · Active · 101 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $59,158/mo
• Mortgage (P&I): −$23,598
• Tax + insurance: −$2,755
• HOA: −$0
• Vac / Maint / Mgmt: −$12,423
• Net cashflow: $20,381/mo
• Annual: $244,575/yr
• Cap rate: 11.73%
• Cash-on-cash: 19.41%
• DSCR: 1.86
• 1% rule: 1.31%
• Cash to close: $1,260,000

Investor read

• This is a 22 × 18-bed/22.0-bath units multifamily listed at $4.50M.
• At list price, monthly cash flow is $20k ($245k/yr) — positive. Per door: $926/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($59k rent vs $4.50M).
• It's been on market 101 days — a 9% lower offer ($4.09M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $4.09M (9.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $31k of loan paydown is wiped out by about $135k of value loss. Plan a longer hold.
• Location reads 70/100 on livability (#239 in CA) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; 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.
• Watch-outs: built in 1923 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.5%/yr); 334 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.
• At projected returns (-3.0% appreciation + 0.0% rent growth), your $1.26M cash investment doubles in ~8 years — after that, you're playing with house money.
• 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 11.7% vs local median 1.5% in West Hollywood — 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 $59,158/mo this rent would consume 738% of the median local household income ($96k/yr) (locally 5563% 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 101 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 1923 — 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 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?
• 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?