1427 Euclid St

Santa Monica, CA 90404

$2,275,000C-

2 bd · 2.0 ba · 840 sqft · Built 1949 · MultiFamily · Active · 156 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $21,405/mo
• Mortgage (P&I): −$11,930
• Tax + insurance: −$3,366
• HOA: −$0
• Vac / Maint / Mgmt: −$4,495
• Net cashflow: $1,613/mo
• Annual: $19,359/yr
• Cap rate: 7.14%
• Cash-on-cash: 3.04%
• DSCR: 1.14
• 1% rule: 0.94%
• Cash to close: $637,000

Investor read

• This is a 6 × 3-bed/8.0-bath units multifamily listed at $2.27M.
• At list price, monthly cash flow is $2k ($19k/yr) — positive. Per door: $269/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 $2.14M (5.9% below list).
• It's been on market 156 days — a 12% lower offer ($2.00M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $2.00M (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $16k of loan paydown is wiped out by about $68k of value loss. Plan a longer hold.
• Location reads 72/100 on livability (#178 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.
• Santa Monica-Malibu Unified (urban): math 61% / reading 74% proficiency, ranked #123 of 1,400 in CA (top 9%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents flat; 66 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals lingering (median 44d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 50% 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.
• 7 sale attempts since 3y ago; this cycle's ask is 103545% above the opening price — seller raised mid-cycle; expect resistance to lowballs.
• Climate carrying-cost: extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 7.1% vs local median 1.2% in Santa Monica — 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 $21,405/mo this rent would consume 270% of the median local household income ($95k/yr) (locally 1828% 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 156 days. Have you received any prior offers? Is the seller open to a 12% 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 1949 — 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?