40 Ximeno

Long Beach, CA 90803

$1,895,000D-

7 bd · 6.0 ba · 3,890 sqft · Built 1949 · MultiFamily · Active · 1 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $13,343/mo
• Mortgage (P&I): −$9,938
• Tax + insurance: −$1,716
• HOA: −$0
• Vac / Maint / Mgmt: −$2,802
• Net cashflow: $-1,113/mo
• Annual: $-13,356/yr
• Cap rate: 5.59%
• Cash-on-cash: -2.52%
• DSCR: 0.89
• 1% rule: 0.70%
• Cash to close: $530,600

Investor read

• This is a 5×1bd/1.0ba + 1×2bd/1.0ba units multifamily listed at $1.90M.
• At list price, monthly cash flow is $-1k ($-13k/yr) — negative. Per door: $-186/mo.
• To cash-flow at today's rent, offer at most $1.70M (10.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $1.33M (29.6% below list).
• Only 1 days on market — expect competitive offers; lowballing is unlikely to land.
• Recommended offer: $1.33M (29.6% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $13k of loan paydown is wiped out by about $57k of value loss. Plan a longer hold.
• Location reads 67/100 on livability (#319 in CA) — a middle-class / working-renter tenant base. Strengths: amenities A+, commute A+, employment B+; Watch: health & safety C-, crime F, cost of living F.
• Long Beach Unified (urban): math 34% / reading 50% proficiency, ranked #216 of 517 in CA (top 42%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases.
• Watch-outs: built in 1949 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.7%/yr); 135 active listings in the ZIP; high-income renter base; 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.
• Current owner paid $400k; list at $1.90M implies a 374% gain — meaningful room to come down on a strong offer.
• Cap rate 5.6% vs local median 1.9% in Long Beach — 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 $13,343/mo this rent would consume 140% of the median local household income ($115k/yr) (locally 1537% 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?
• 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?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• 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?
• 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.