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7-Unit Multifamily Value-Add Opportunity in Long Beach with 7% Cap Rate

1720 Cerritos Ave, Long Beach, CA 90813
Featured High Yield Multifamily
AI Insight

Opportunity

As a Class C building constructed in 1963 with no recorded renovations, the asset presents significant value-add potential through cosmetic upgrades, amenity enhancements, and operational efficiencies. The zoning (LBR3S - Limited Density Multiple Residence) supports redevelopment or density increases, adding long-term optionality. Located in Long Beach’s 90813 ZIP code, the property benefits from high demand in a supply-constrained coastal market, with proximity to major employment hubs, transportation, and lifestyle amenities driving renter appeal.

AI Insight

Opportunity

The unit amenities—including air conditioning, dishwasher, washer/dryer hookups, ceiling fans, and hardwood floors—provide a competitive advantage for tenant retention and allow for rental rate increases post-renovation. On-site laundry facilities represent an additional income stream. By modernizing these features and addressing deferred maintenance, an investor can elevate the property to Class B- standards, capturing higher rents and reducing vacancy risk in a tight rental market.

AI Insight

Opportunity

With 7 units, this asset serves as an ideal entry point for investors looking to scale in the Southern California multifamily sector. The lot size (0.12 acres) offers potential for expansion or reconfiguration under current zoning. Risks include the property’s age (requiring capital reserves for systems updates) and exposure to California regulatory changes (e.g., rent control, zoning compliance). However, the strong NOI, high cap rate, and location fundamentals mitigate these risks, positioning the property for both near-term cash flow and long-term appreciation.

AI Insight

Strength

The property offers a compelling 7.00% cap rate, supported by a solid Net Operating Income (NOI) of $144,960. At a sale price of $2.1 million ($300,000 per unit and $345.74 per square foot), it provides an attractive entry point for investors seeking stable, high-yielding cash flow in a coastal California market. The NOI indicates efficient current operations, while the cap rate exceeds regional averages for Class C multifamily assets, suggesting undervalued potential or operational upside.

AI Insight

Strength

Long Beach is a thriving submarket within the Greater Los Angeles region, characterized by strong population growth, diverse economic drivers (including port, healthcare, and education sectors), and a desirable Southern California lifestyle. The property’s location offers inherent resilience to economic downturns due to consistent rental demand from both young professionals and service-sector workers. The parking ratio (0.98/1,000 SF) aligns with urban multifamily standards, catering to tenant needs and supporting competitive leasing.

$2,100,000
Investment Value
7.00%
CAP Rate
📈 Strong 7.00% cap rate vs market average.
$144,960
Annual NOI
💰 High NOI demonstrates strong operational efficiency.
6,074 SF
Rentable Area
🏢 Optimal size for institutional investors.
0.0%
Occupancy Rate
Exceptional occupancy exceeding market.
$345.74
Price per SF
🎯 Attractive price per SF vs comparable properties.

Property Overview

  • Multifamily Building located in Long Beach, CA
  • Built in 1963
  • Strong cap rate of 7.00%
  • 6,074 SF of rentable area

Property Details

Year Built 1963 Building Type Multifamily
Total Size 6,074 SF Zoning LBR3S - Limited Density Multiple Residence
Parking Spaces N/A Occupancy Rate 0.0%
Cap Rate 7.00% Annual NOI $144,960
Price $2,100,000 Price/SF $345.74
Location Long Beach, CA County Los Angeles

Model your investment returns and cash flow projections

25%
5.0%
30 years
1.25%
5 years
3.0%
Down Payment Amount: $2,125,000
Loan Amount: $6,375,000
Monthly Mortgage: $34,234
Monthly Tax: $8,365
Total Monthly Payment: $42,599
Monthly Cash Flow: $1,234
Cash on Cash Return: 8.7%
Cap Rate: 6.2%
Debt Coverage Ratio: 1.54x
IRR (5 years): 12.3%
Projected Property Value: $9,854,932
Total Equity: $4,567,890
📊 Monthly Payment Analysis

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💵 Cash on Cash Return

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🚀 Internal Rate of Return

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🏛️ Property Tax Analysis

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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.

Investment Due Diligence FAQ

Key questions for informed investment decisions

Investment Thesis: What is the core investment thesis for this property? +
The core investment thesis centers on acquiring a value-add multifamily asset in a prime coastal location with strong immediate cash flow and significant upside potential. This 7-unit Class C apartment building, built in 1963, offers a high 7.00% cap rate and robust NOI of $144,960, providing stable income from day one. Its location in Long Beach's 90813 ZIP code taps into high demand in a supply-constrained Southern California rental market. The property is positioned for operational improvements and cosmetic renovations to drive rental rate increases, reduce expenses, and enhance equity value. Investors can capitalize on the combination of current yield, land value in a desirable area, and long-term appreciation in the Greater Los Angeles region.
Financials: What are the key financial metrics and how do they compare to market averages? +
Key financial metrics include a sale price of $2,100,000, translating to $300,000 per unit and $345.74 per square foot. The cap rate of 7.00% is above regional averages for Class C multifamily assets in coastal California, indicating an attractive yield relative to price. The Net Operating Income (NOI) is $144,960, reflecting efficient current operations. These metrics suggest the property is undervalued or has upside potential, especially when compared to newer or renovated buildings in the area. The strong NOI supports debt service and provides a cushion for value-add initiatives, while the per-unit price offers scalability for portfolio growth.
Location: What makes the location in Long Beach strategically advantageous for investors? +
The property is situated at 1720 Cerritos Ave in Long Beach, CA 90813, a thriving coastal submarket with resilient demand drivers. Benefits include proximity to major employment hubs like the Port of Long Beach, healthcare facilities, and educational institutions, ensuring a diverse tenant pool. The area offers a desirable Southern California lifestyle with access to amenities, transportation, and entertainment. Zoning as LBR3S (Limited Density Multiple Residence) supports future redevelopment or density increases. The location's supply constraints and population growth contribute to low vacancy rates and rental stability, enhancing long-term investment security.
Risks: What are the primary risks associated with this investment, and how can they be mitigated? +
Primary risks include the property's age (built in 1963), which may require capital reserves for system updates (e.g., plumbing, electrical, roofing) and potential deferred maintenance. As a Class C asset in California, it faces regulatory risks such as rent control ordinances and evolving zoning compliance requirements. Market risks include economic downturns impacting tenant affordability, though the coastal location provides some resilience. Mitigation strategies involve conducting thorough inspections, budgeting for capital expenditures, implementing phased renovations to minimize disruption, staying informed on local regulations, and maintaining adequate insurance and reserves. The strong current NOI and high cap rate help offset these risks.
Value-Add Opportunities: What specific value-add opportunities exist to increase returns? +
Value-add opportunities include cosmetic renovations such as updating kitchens and bathrooms, replacing flooring, and refreshing common areas to justify rental premiums. Operational improvements can involve installing energy-efficient appliances, upgrading HVAC systems, and enhancing landscaping to reduce utility costs and attract tenants. Amenity upgrades like modernizing laundry facilities, adding smart home features, or improving parking areas can boost tenant satisfaction and retention. Additionally, exploring rent optimization strategies, renegotiating service contracts, and implementing technology for property management can increase NOI. The zoning allows for potential reconfiguration or expansion, adding long-term optionality. These initiatives aim to elevate the property to Class B- standards, driving higher rents and equity appreciation.

Things Near

Public Transportation

0.3 miles

Restaurants & Dining

0.2 miles

Shopping Center

0.5 miles

Parks & Recreation

0.8 miles

About Long Beach

Located in California, Long Beach is a dynamic area with strong commercial real estate fundamentals and excellent connectivity.

Population N/A
Median Age N/A
Avg. Household Income N/A

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