8521 Horner St

Los Angeles, CA 90035

$3,395,000B-

8 bd · 8.0 ba · 7,363 sqft · Built 1931 · MultiFamily · Active · 20 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $103,144/mo
• Mortgage (P&I): −$17,804
• Tax + insurance: −$4,240
• HOA: −$0
• Vac / Maint / Mgmt: −$21,660
• Net cashflow: $59,440/mo
• Annual: $713,280/yr
• Cap rate: 27.30%
• Cash-on-cash: 75.03%
• DSCR: 4.34
• 1% rule: 3.04%
• Cash to close: $950,600

Investor read

• This is a 8-bed/8.0-bath multifamily listed at $3.40M.
• At list price, monthly cash flow is $59k ($713k/yr) — positive.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($103k rent vs $3.40M).
• It's been on market 20 days — a 2% lower offer ($3.34M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $3.34M (1.5% below list) — sets the bar for market timing.
• In year one you build about $116k of equity ($23k loan paydown + $92k appreciation (2.7% local appreciation)).
• 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 1931 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents soft (-1.6%/yr); 108 active listings in the ZIP; 1 comparable units currently listed for rent nearby; 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 9y 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.
• Current owner paid $2.40M; 41% above their basis — modest negotiation headroom, anchor on the comps not their cost.
• At projected returns (2.7% appreciation + 0.0% rent growth), your $951k cash investment doubles in ~2 years — after that, you're playing with house money.
• By year 3, paydown + projected appreciation supports a ~$289k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: major flood risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 27.3% 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.

Questions for listing agent

• Built in 1931 — 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.
• 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?
• 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 apartment / multifamily construction is in the pipeline within 1–3 miles? Heavy new supply (>2% of stock underway) typically softens rents 12–24 months out; light construction supports rent growth.