Margins are tight on normalized income — seller cap of 5.92% settles at 5.08% after expense due diligence.
Seller markets this at a 5.92% cap. Normalize for expenses and it settles at 5.08% — within the 4.8–6.2% market range, but the spread to seller-stated NOI is wide.
Core return metrics are marginal at the current ask. Insurance reserve and replacement reserves are materially understated. Loss-to-lease of 12.40% provides a clear path to upside, but only if turnover supports it. Recommend independent rent-roll verification and a walked CapEx plan before committing.
| Source | Per unit | Total |
|---|---|---|
| Senior debt (70% LTV) | $191K | $6,860,000 |
| Equity | $87K | $3,128,000 |
| Total | $277K | $9,988,000 |
| Use | Per unit | Total |
|---|---|---|
| Acquisition cost | $272K | $9,800,000 |
| Closing costs (2.0%) | $5K | $196,000 |
| Operating reserves | $2K | $72,000 |
| Immediate CapEx | $2K | $60,000 |
| Total | $281K | $10,128,000 |
36-unit property in Long Beach, Los Angeles County.
Garden-style mid-rise on a 0.8-acre lot, two blocks from the Long Beach Blue Line. Stable rent collections per T-12. 1970s vintage — budget meaningful CapEx for plumbing, roof, and exterior envelope in underwriting.
Long Beach metro fundamentals are tightening.
Long Beach multifamily vacancy is 3.8% (Q1 2026), below the LA County average of 4.5%. Rent growth of +3.4% YoY is supported by Port-area employment and limited new supply west of the 710. Market cap rates for 1970s vintage product range 4.8–6.2%.
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