Prime San Fernando Multifamily: 5-Unit Value-Add Opportunity with 7.76% Cap Rate
123 Orange Grove Ave, San Fernando, CA 91340Opportunity
Value-Add Potential for Enhanced Returns: Built in 1986 with no recorded renovations, this Class C building presents clear value-add opportunities. Strategic upgrades—such as modernizing unit interiors, improving common areas, or adding energy-efficient features—could increase rental income and property value. The zoning (SFR3* - Industrial General) allows for potential mixed-use redevelopment, offering long-term upside beyond typical multifamily operations.
Risk
Balanced Risk Profile with Mitigatable Challenges: As a Class C property in an area zoned for industrial use, investors should consider potential risks, such as higher tenant turnover or nearby industrial activity impacting desirability. However, these are mitigated by the strong cash flow, affordable price point, and zoning versatility. A phased value-add strategy—focusing on cosmetic upgrades and operational efficiencies—can reduce vacancy risks and position the asset for appreciation as San Fernando’s market matures.
Strength
Attractive Cash Flow with Solid Cap Rate: The property generates a Net Operating Income (NOI) of $98,945, resulting in a calculated cap rate of 7.76%. This exceeds the average for Class C multifamily properties in the Greater Los Angeles area (typically 5–7%), indicating strong current income relative to the purchase price. The price per square foot of $117.10 and price per unit of $255,000 are below regional benchmarks, suggesting undervaluation. With individually metered utilities, operational costs are controlled, enhancing cash flow stability.
Strength
Strategic Location in a Growth Market: Situated in San Fernando, CA, the property benefits from proximity to key transportation routes (e.g., I-5 and SR-118) and urban development initiatives in the Greater Los Angeles region. San Fernando is experiencing increased demand for affordable housing, driven by population growth and limited new supply. The industrial-general zoning provides flexibility for future adaptive reuse, aligning with market trends toward live-work-play environments.
Strength
Manageable Scale with Functional Attributes: With 5 units on a 0.19-acre lot, this low-rise building offers a manageable entry point for investors while minimizing operational complexity. The parking ratio of 3/1,000 SF meets local standards, and individually metered utilities promote tenant accountability—a competitive advantage in cost-sensitive Class C segments.
Property Overview
- Multifamily Building located in San Fernando, CA
- Built in 1986
- Strong cap rate of 7.76%
- 10,888 SF of rentable area
Property Details
| Year Built | 1986 | Building Type | Multifamily |
| Total Size | 10,888 SF | Zoning | SFR3* - Industrial General |
| Parking Spaces | N/A | Occupancy Rate | 0.0% |
| Cap Rate | 7.76% | Annual NOI | $98,945 |
| Price | $1,275,000 | Price/SF | $117.10 |
| Location | San Fernando, CA | County | Los Angeles |
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* Calculations are estimates only. Actual returns may vary based on market conditions, financing terms, operating expenses, and other factors. Consult with financial and legal professionals before making investment decisions.
Where Your NOI Goes Each Month
* Distribution based on current inputs. Actual expenses may vary.
Total Return if Sold (Exit Strategy)
* Assumes property appreciation and no sale costs. Past performance doesn't guarantee future results.
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Things Near
Public Transportation
0.3 milesRestaurants & Dining
0.2 milesShopping Center
0.5 milesParks & Recreation
0.8 milesAbout San Fernando
Located in California, San Fernando is a dynamic area with strong commercial real estate fundamentals and excellent connectivity.
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