3524 E Avenue R Spc 312

Palmdale, CA 93550

$173,000C+

3 bd · 2.0 ba · 1,104 sqft · Built 1999 · Manufactured · Pending · 27 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,774/mo
• Mortgage (P&I): −$907
• Tax + insurance: −$114
• HOA: −$0
• Vac / Maint / Mgmt: −$583
• Net cashflow: $1,171/mo
• Annual: $14,050/yr
• Cap rate: 14.41%
• Cash-on-cash: 29.01%
• DSCR: 2.29
• 1% rule: 1.60%
• Cash to close: $48,440

Investor read

• This is a 3-bed/2.0-bath manufactured listed at $173k.
• At list price, monthly cash flow is $1k ($14k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $173k).
• It's been on market 27 days — a 2% lower offer ($170k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $170k (1.5% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 55/100 on livability (#861 in CA) — a working-class tenant base; expect higher turnover. Strengths: housing A+; Watch: schools F, crime F, amenities F.
• Palmdale Elementary (suburban): math 20% / reading 31% proficiency, ranked #1,147 of 1,400 in CA (top 82%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover; 69% free/reduced lunch — lower-income household profile, screen leases tightly.
• Market conditions: Rents rising (+1.8%/yr); 408 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals leasing fast (median 0d on market — plan ~1-2 weeks tenant-placement turnaround); 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.
• 2 sale attempts since 21y 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.
• At projected returns (-3.0% appreciation + 1.8% rent growth), your $48k cash investment doubles in ~5 years — after that, you're playing with house money.
• Climate carrying-cost: major wildfire risk; extreme-heat days projected 2→5/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 14.4% vs local median 4.5% in Palmdale — 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 $2,774/mo this rent would consume 54% of the median local household income ($62k/yr) (locally 4384% of renters already pay >50% of income on rent) — very limited rent-growth headroom before tenants either downsize or default.

Questions for listing agent

• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are F-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?
• 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.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.