1537 N Serrano Ave N

Los Angeles, CA 90027

$3,250,000F

1 bd · 1.0 ba · 4,464 sqft · Built 1919 · MultiFamily · Active · 198 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $8,067/mo
• Mortgage (P&I): −$17,043
• Tax + insurance: −$4,544
• HOA: −$0
• Vac / Maint / Mgmt: −$1,694
• Net cashflow: $-15,215/mo
• Annual: $-182,579/yr
• Cap rate: 0.68%
• Cash-on-cash: -20.06%
• DSCR: 0.11
• 1% rule: 0.25%
• Cash to close: $910,000

Investor read

• This is a 2 × 2-bed/1-bath units multifamily listed at $3.25M.
• At list price, monthly cash flow is $-15k ($-183k/yr) — negative. Per door: $-8k/mo.
• To cash-flow at today's rent, offer at most $766k (76.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $807k (75.2% below list).
• It's been on market 198 days — a 12% lower offer ($2.86M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $766k (76.4% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $22k of loan paydown is wiped out by about $98k 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-, schools D+, crime 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 1919 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+2.3%/yr); 122 active listings in the ZIP; 3 comparable units currently listed for rent nearby; rentals lingering (median 45d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 67% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 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 0.7% vs local median 2.1% in Los Angeles — below-typical yield; the buyer is paying a premium for something (appreciation thesis, condition, location) that the cap rate doesn't capture.
• At $8,067/mo this rent would consume 102% of the median local household income ($95k/yr) (locally 4571% 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 198 days. Have you received any prior offers? Is the seller open to a 76% 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 1919 — 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?