128 19th st Investment Analysis

“The Wilson” building is small apartment complex in a desirable area of Pacific Grove for renters. The building was purchased about 18 months ago and upgraded by the current owner. The building was built in 1912 and is a cornerstone of the neighborhood. I do not believe it is considered a historic building.


From a cash flow investment perspective, this building does not make sense at its current sales price. With 25% down, cash flow would be -$2000 per month. The rents are currently maxed out and there is very little value left to add. The owner did an excellent job upgrading the building but the price is far too high. A more realistic purchase price for this building would be around $225,000 per unit. This new price would make sense from an investment standpoint for a buyer.

The building is made of 8 units. 4 of which are studios. The other 4 are one bedrooms and some have lofts. The turnover rate at this building would be very high. It would require a property manager or involved owner manager.
The units are in very good condition so they would need very little work at the onset of purchase.

From a cash flow perspective, we cannot recommend the purchase of this building at its’ current list price. If you are purchasing with intentions of appreciation, it may be a viable strategy. Typically when buying for appreciation, it is ideal to be able to force some of the appreciation through upgrades. Since this building is currently turn-key there are limited opportunities for forced appreciation.

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Krisland