425 N Palm Dr #102

Beverly Hills, CA 90210

$3,099,000D-

2 bd · 3.0 ba · 2,820 sqft · Built 2023 · Land · Active · 160 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $7,572/mo
• Mortgage (P&I): −$16,251
• Tax + insurance: −$2,409
• HOA: −$2,662
• Vac / Maint / Mgmt: −$1,590
• Net cashflow: $-15,341/mo
• Annual: $-184,091/yr
• Cap rate: 0.35%
• Cash-on-cash: -21.22%
• DSCR: 0.06
• 1% rule: 0.24%
• Cash to close: $867,720

Investor read

• This is a 2-bed/3.0-bath land listed at $3.10M.
• At list price, monthly cash flow is $-15k ($-184k/yr) — negative.
• To cash-flow at today's rent, offer at most $389k (87.4% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $757k (75.6% below list).
• It's been on market 160 days — a 12% lower offer ($2.73M) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $389k (87.4% below list) — sets the bar for cash-flow.
• In year one you build about $318k of equity ($21k loan paydown + $296k appreciation (9.6% local appreciation)).
• Location reads 74/100 on livability (#138 in CA, #4,810 nationally) — a middle-class / working-renter tenant base. Strengths: schools A+, amenities A+, commute A+; Watch: housing C-, health & safety C-, crime F.
• Beverly Hills Unified (suburban): math 57% / reading 73% proficiency, ranked #61 of 517 in CA (top 12%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 7% free/reduced lunch — higher-income household profile.
• Watch-outs: HOA is 35% of rent.
• Market conditions: Rents rising (+1.7%/yr); 308 active listings in the ZIP; 40 comparable units currently listed for rent nearby; rentals at typical pace (median 25d on market — plan ~3-4 weeks tenant-placement turnaround); 48% of comp listings sitting > 30 days — soft ceiling on asking rent; 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.
• 4 sale attempts since 2y 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.
• By year 2, paydown + projected appreciation supports a ~$510k cash-out refi (75% LTV) — recoverable capital for the next deal without selling this one.
• Climate carrying-cost: moderate flood risk; extreme-heat days projected 7→21/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• At $7,572/mo this rent would consume 48% of the median local household income ($188k/yr) (locally 911% 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 160 days. Have you received any prior offers? Is the seller open to a 87% concession, seller financing, or rate buy-down credit?
• What does the HOA fee cover, when was the last increase, and are there any pending special assessments or reserve-fund shortfalls?
• 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?
• 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?