The Setup
Two two-story buildings on a 26,136 SF lot, 38 one-bedroom units averaging 700 SF, built in 1986.vvAt 38 units and $1,634 average in-place rent, gross scheduled income implied by the 10.27 GRM is approximately $744,888 annually.
The AB 1482 Math
Built in 1986, this property clears the 1978 RSO cutoff cleanly. LARSO does not apply. But AB 1482 does, and the database confirms it. That means the new owner inherits just-cause eviction requirements for all tenants past 12 months of occupancy, and annual rent increases capped at 5% plus local CPI, not to exceed 10%.
At current California CPI trends (roughly 3%), the effective annual increase ceiling is approximately 8%. Applied to the $1,634 in-place average:
| Year | Avg Rent / Unit (8% annual max) | Annual GSI (38 units) |
|---|---|---|
| Year 0 (now) | $1,634 | $744,888 |
| Year 1 | $1,765 | $804,840 |
| Year 2 | $1,906 | $869,136 |
| Year 3 | $2,058 | $938,544 |
| Year 4 | $2,223 | $1,012,968 |
That four-year ramp assumes no vacancy and that is if this market can get to $2200. Even if not by year 4, its possible to get there by year 5-7.
What an Operator Sees
I like the year on this one.
1986.
No RSO.
$278 a foot for 38 ones, full ask.
I don't have the buyer.
I don't have a rent roll.
I'm keeping the $201k door and the year.
I'm researching the market to make better investment strategies. I'm sharing what I find along the way with other investors to have discussions, debates and help make better decisions.
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Property and transaction data: CoStar Research.