Investment Highlights
• Comprehensive 2024 Gut Renovation with New COFO: The entire building was gut renovated, resulting in a new Certificate of Occupancy issued in 2024. Over $1.2 million in capital improvements were completed, including all-new plumbing, electrical systems, drywall, paint, flooring, and cabinetry. This turnkey status provides investors with a high-quality asset and minimal immediate maintenance requirements.
• Proven Micro-Unit Model with Strong Rental Yield: The building features 23 units comprised primarily of micro-units (87% studios) designed to serve budget-oriented residents in Los Angeles. This high-efficiency model yields an impressive rent of $5.28 per square foot, justifying the property’s valuation through proven rental demand for smaller, affordable living spaces.
• Immediate Financial Performance and High Returns: At an asking price of $3,000,000, the property offers a current CAP rate of 6.62% and a 5.29% Cash-on-Cash return, with substantial mark-to-market upside as legacy leases are brought to the property’s own recently-achieved renovated rents.
• Substantial Built-In Revenue Upside: There is significant potential for growth, with the pro forma CAP rate projected at 8.19% and a Cash-on-Cash return of 10.52%. Financial projections show that monthly income can grow from the current $34,290 to a market rate of $38,337, representing an approximately 12% revenue increase as legacy leases are marked to market.
• Strategic Location in Historic South Central Hub: Located at 440 E 27th Street, the property is nestled in a thriving rental hub near the University of Southern California (USC) and major transit routes like the Expo Line. The neighborhood is experiencing active revitalization and sits within a demographic area projected to have an average household income of $81,857 within a 3-mile radius by 2026.