13660 Annandale Dr APT 23H, Seal Beach, CA 90740 — 23.0% Cash-on-Cash

About this property

This 800-square-foot, one-bedroom condo sits inside Leisure World Seal Beach, a 55-plus gated community in Orange County, listed at $199,999 with 13 days on market.

The unit's most immediately useful feature for an investor is what it isn't: it isn't a gut renovation. The listing describes it as a fixer-upper with a skylit cathedral ceiling in the living room, a covered patio overlooking a garden, and an open kitchen layout — bones that translate to cosmetic upside without structural unknowns. The patio includes a private storage room, and an assigned carport comes with the unit.

Leisure World's amenity package is extensive — golf, pool, fitness, six clubhouses, 24-hour guarded security — which is the primary driver of the $519/month HOA fee. That fee is the single largest line item in the monthly cost structure and deserves scrutiny before any offer. In exchange, the HOA absorbs most exterior maintenance, which compresses the landlord's ongoing cost exposure.

The property has been on market 13 days, with no price reduction from the original list. At $199,999, it is priced at roughly $250 per square foot — below the for-sale comp median on a per-foot basis, given that nearby comparable units are smaller but listed at higher prices. The 55-plus age restriction is a hard constraint on the tenant pool, which any investor must underwrite carefully.

The investment case

A 23% cash-on-cash return at a $199,999 price point is the headline metric here — and the underlying numbers hold up to scrutiny when you walk through each line.

List Price

$199,999

Monthly Payment (PITI+HOA)

$1,638

Principal & Interest

$1,052

Property Tax

$0

Insurance

$67

HOA

$519

PMI

$0

Est. Monthly Rent

$2,404

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

23.0%

Cap Rate

10.9%

Monthly Cash Flow

$766

Gross Rent Multiplier

6.9

DSCR

1.7

At 20% down ($40,000), the principal and interest payment on a 30-year fixed at 6.55% comes to $1,052/month. Add $67 for insurance and $519 for HOA, and total monthly outlay reaches $1,638. Estimated monthly rent of $2,404 produces a net cash flow of $766 — every month, before taxes and maintenance reserves.

The cap rate of 10.9% and net operating income of $1,818/month are the figures that matter most for valuing the asset independent of financing. A 10.9% cap rate in coastal Orange County is structurally unusual; most comparable coastal markets price assets at 4-6% cap rates. The gross rent multiplier of 6.9 reinforces the same signal — the purchase price is low relative to the annual rent income this unit is projected to generate.

The debt service coverage ratio of 1.7 means rent covers the mortgage payment 1.7 times over. Lenders typically require 1.25 for investment property loans; 1.7 provides meaningful cushion against vacancy or a rent shortfall.

One critical caveat: the $519/month HOA is not optional and is not tax-deductible in the same way mortgage interest is. It represents 32% of total monthly outlay. If HOA dues increase — which they do in most managed communities over time — cash flow compresses directly. Figures exclude depreciation tax benefits, which vary by individual tax situation.

The investment case is straightforward on paper: low purchase price, high rent-to-price ratio, strong coverage. The HOA trajectory is the variable that could erode it.

Annual return outlook

The projected 32.1% five-year total ROI breaks into three components — and cash flow is doing most of the work.

Cash flow contributes 23.0 percentage points of the 32.1% total — the dominant driver by a wide margin. Mortgage paydown adds another 5.4 points as principal amortizes over the period. Appreciation contributes an estimated 3.8 points annually, though that figure is a modeled estimate rather than a market-sourced data point, so it warrants softer weighting in the underwriting.

For a property priced this low in a coastal California market, the appreciation contribution is almost secondary. The cash-on-cash alone justifies the investment thesis if rent holds near the $2,404 estimate. If appreciation comes in below 3.8% annually — a realistic scenario given the 55-plus restriction limiting buyer demand — the total ROI still clears 28% over five years on cash flow and paydown alone.

The 55-plus age restriction does constrain future resale liquidity. The buyer pool for a Leisure World unit is narrower than for a conventional condo, which could cap appreciation relative to unrestricted properties. Investors who plan to hold for income rather than flip in three years are better positioned to absorb that constraint.

Cash flow and paydown carry the five-year return; appreciation is a bonus, not a load-bearing assumption.

How it compares to nearby for-sale listings

Five active for-sale listings in the same zip code provide a pricing reference — and this unit's $199,999 price sits at the low end of the range.

The for-sale comp median in ZIP 90740 is $299,000, meaning this property is priced approximately 33% below the median comparable listing. Four of the five comps are 600-square-foot units; this property offers 800 square feet. On a price-per-square-foot basis, the gap widens further — this unit comes in around $250/sqft while the 600-sqft comps at $240,000-$329,000 range from $400 to $548/sqft.

That spread is partially explained by condition. The listing explicitly flags this as a fixer-upper, which typically discounts price-per-foot. But even accounting for renovation costs, the raw entry price is meaningfully below what comparable units are trading at in the same community.

Days on market across the comps range from 3 to 32 days. This unit's 13 days on market is mid-range — not a distressed overhang, not a brand-new listing. The absence of any price reduction from the original list price suggests the seller isn't under acute pressure, but also isn't holding firm at an aspirational number.

For an investor, the comp table matters less for exit pricing than for rent comparability. The 55-plus restriction means resale comparables are specific to Leisure World inventory, and that pool is what the table reflects.

Rental demand in this zip

Rental comp data for one-bedroom units in ZIP 90740 is thin — zero active rental listings matched in the area — so the rent estimate carries more uncertainty than usual.

Estimated monthly rent of $2,404 is the projection used in this analysis. With no active rental comps in the zip code to validate against, that number is a modeled estimate rather than a market-observed rate. That's a meaningful distinction for underwriting purposes.

The 55-plus age restriction further complicates rent comparability. Leisure World units rent to a specific demographic — retirees who qualify under the community's age rules — which can support stable, longer-tenured tenancies but also limits the depth of the tenant pool. Vacancy risk in a restricted community depends heavily on how many qualified renters are actively looking in Seal Beach at any given time.

The positive read: Leisure World's amenity package — pool, golf, fitness, security — is a genuine draw for the target renter, and the coastal Orange County location supports premium rent expectations. If the $2,404 estimate is even 10% high, monthly cash flow drops to roughly $526, and the cash-on-cash return compresses to around 15.8%. That's still a strong return relative to most coastal California alternatives, but investors should stress-test the rent assumption before closing.

The rent projection is plausible but unconfirmed by local comp data — conservative underwriting means penciling in a 10-15% haircut and checking that the deal still works.

Who this property suits + risks to weigh

This property suits an income-focused investor comfortable with a niche tenant pool and a high HOA — not a value-add flipper or a short-term hold play.

Best fit

The investor who fits this deal is one prioritizing current cash flow over appreciation upside. The $766/month net and 23% cash-on-cash return are the draw; the 3.8% estimated annual appreciation is a secondary benefit, not the thesis. A self-directed IRA or a retiree investor looking for passive income in a familiar asset class — a 55-plus community they understand — is a natural fit. The low absolute price ($199,999) also makes this accessible to investors who can't deploy $500,000+ into a single coastal California asset.

The fixer-upper condition creates a value-add angle for an investor willing to budget for cosmetic renovation. Cathedral ceilings and a garden patio are marketable features; updating the kitchen and bath could push rent above the $2,404 estimate and improve resale positioning within the Leisure World comp set.

Risks to weigh

The $519/month HOA is the primary risk lever. It's already the largest single cost line item, and HOA fees in amenity-heavy communities tend to rise over time as infrastructure ages. A $100/month HOA increase wipes out roughly 13% of current monthly cash flow. Investors should request the last three years of HOA financials and reserve fund disclosures before committing.

The 55-plus restriction limits both the tenant pool and the eventual buyer pool. Vacancy between tenants could run longer than in an unrestricted building, and exit liquidity depends on finding a buyer who qualifies under the community's age rules. Zero rental comps in the zip code means the $2,404 rent estimate is unverified — that's the number that makes the entire investment case work, and it deserves independent validation.