1038 W 21st St

Los Angeles, CA 90007

$975,000F

8 bd · 4.0 ba · 4,752 sqft · Built 1914 · MultiFamily · Active · 405 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,978/mo
• Mortgage (P&I): −$5,113
• Tax + insurance: −$872
• HOA: −$0
• Vac / Maint / Mgmt: −$835
• Net cashflow: $-2,843/mo
• Annual: $-34,111/yr
• Cap rate: 2.79%
• Cash-on-cash: -12.49%
• DSCR: 0.44
• 1% rule: 0.41%
• Cash to close: $273,000

Investor read

• This is a 8-bed/4.0-bath multifamily listed at $975k.
• At list price, monthly cash flow is $-3k ($-34k/yr) — negative.
• To cash-flow at today's rent, offer at most $473k (51.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $398k (59.2% below list).
• It's been on market 405 days — a 12% lower offer ($858k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $398k (59.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $7k of loan paydown is wiped out by about $29k 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 1914 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.9%/yr); 82 active listings in the ZIP; 4 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; lower-income renter base — watch delinquency; 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.
• 8 sale attempts since 24y ago; this cycle's ask has dropped $325k (25%) from the opening price — seller is motivated, your offer sets the floor, not the list.
• Current owner paid $255k; list at $975k implies a 282% 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 2.8% vs local median 2.1% in Los Angeles — 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 $3,978/mo this rent would consume 135% of the median local household income ($35k/yr) (locally 4179% 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 405 days. Have you received any prior offers? Is the seller open to a 59% concession, seller financing, or rate buy-down credit?
• Built in 1914 — 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?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?