38857 9th St E

Palmdale, CA 93550

$325,000C

2 bd · 2.0 ba · 1,412 sqft · Built 1953 · MultiFamily · Active · 290 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,426/mo
• Mortgage (P&I): −$1,704
• Tax + insurance: −$549
• HOA: −$0
• Vac / Maint / Mgmt: −$719
• Net cashflow: $454/mo
• Annual: $5,444/yr
• Cap rate: 7.97%
• Cash-on-cash: 5.98%
• DSCR: 1.27
• 1% rule: 1.05%
• Cash to close: $91,000

Investor read

• This is a 2 × 1-bed/1.0-bath units multifamily listed at $325k.
• At list price, monthly cash flow is $454 ($5k/yr) — positive. Per door: $227/mo.
• The deal already cash-flows at list — no discount required.
• Meets the 1% rule at list price ($3k rent vs $325k).
• It's been on market 290 days — a 12% lower offer ($286k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $286k (12.0% below list) — sets the bar for market timing.
• Local home prices are declining (-3.0%/yr); year-one equity from $2k of loan paydown is wiped out by about $10k 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.
• Watch-outs: built in 1953 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising (+1.8%/yr); 410 active listings in the ZIP; 28 comparable units currently listed for rent nearby; rentals leasing fast (median 2d 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.
• 14 sale attempts since 24y 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 $160k; list at $325k implies a 103% gain — meaningful room to come down on a strong offer.
• Climate carrying-cost: severe wildfire risk; extreme-heat days projected 7→16/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 8.0% 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 $3,426/mo this rent would consume 66% 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

• It's been on market 290 days. Have you received any prior offers? Is the seller open to a 12% concession, seller financing, or rate buy-down credit?
• 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 1953 — 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 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?