13760 Alderwood Ln #85I, Seal Beach, CA 90740 — 14.7% Cash-on-Cash

About this property

A 1-bedroom, 1-bath condo spanning 720 square feet, this unit at 13760 Alderwood Ln #85I has been on the market 31 days and carries a $16,000 price reduction from its original ask.

Three skylights — two of which open for ventilation — give this unit more natural light than most comparably priced condos in the 90740 zip. A barn door separates the primary bedroom from a bonus flex space that could function as a second sleeping area or a dedicated home office, which broadens the tenant pool beyond single occupants. In-unit washer and dryer adds a leasing advantage that smaller competing units in the building may not offer.

The property is flagged as non-owner occupied, meaning it's already operating as a rental or has been recently. That's a practical signal: the unit is likely tenant-ready without a significant capital outlay at acquisition. The 31 days on market, combined with the $16,000 price cut, suggests the seller has already adjusted expectations — the current $299,000 ask reflects a more realistic clearing price than the original list.

Lot size is listed as zero, consistent with a condominium structure where the owner holds interior air rights only. The HOA at $588 per month is the single largest line item in the monthly payment stack and warrants close review of reserve fund health before closing.

The investment case

A 14.7% cash-on-cash return at a $299,000 purchase price is the headline metric here — and it holds up under the full payment stack, including a $588 HOA.

List Price

$299,000

Monthly Payment (PITI+HOA)

$2,220

Principal & Interest

$1,532

Property Tax

$0

Insurance

$100

HOA

$588

PMI

$0

Est. Monthly Rent

$2,955

Estimated rent based on automated valuation of comparable listings.

Cash-on-Cash Return

14.7%

Cap Rate

9.1%

Monthly Cash Flow

$735

Gross Rent Multiplier

8.4

DSCR

1.5

At 20% down on a $299,000 purchase with a 6.55% 30-year fixed rate, the monthly principal and interest payment comes to $1,532. Add $100 for insurance and $588 for HOA, and total monthly outlay is $2,220. Against an estimated rent of $2,955, that leaves $735 in monthly cash flow before income taxes and maintenance reserves.

The cap rate of 9.1% and net operating income of $2,267 per month are both strong by any coastal California standard. The gross rent multiplier of 8.4 means the property pays for itself in rent collected in roughly 8.4 years — a figure that compares favorably to the typical 15-to-20 GRM seen on coastal Southern California condos priced at market.

The debt service coverage ratio of 1.5 gives a lender-friendly cushion: for every dollar of debt service, the property generates $1.50 in net operating income. That ratio provides meaningful downside protection if the rent estimate proves optimistic or a vacancy period emerges between tenants.

The city's average cash-on-cash return is listed at 0.0%, which underscores how unusual this yield profile is for Seal Beach. Coastal Orange County properties at this price point rarely produce positive cash flow at conventional financing terms. The $588 HOA is the reason the price is where it is — buyers pricing in that fee compress the list price, and that compression is exactly what creates the yield. Figures exclude depreciation tax benefits, which vary by individual tax situation.

Annual return outlook

The 5-year total ROI projection of 23.1% draws from three distinct return streams, with cash flow doing most of the work.

Cash flow contributes 14.7% of the 23.1% total — it's the dominant component, not a supporting one. Mortgage paydown adds another 4.5% as principal reduction builds equity at the current amortization rate. Appreciation rounds out the stack at an estimated 3.8% annually, though that figure is an estimate rather than a data-derived market forecast and should be treated as directional.

The appreciation contribution matters more here than in a typical cash-flow-heavy deal because Seal Beach is a coastal market where long-term land scarcity tends to support prices. Even a modest annual appreciation rate compounds meaningfully on a $299,000 base. At 3.8% annually, the property's value would reach approximately $360,000 by year five — adding roughly $61,000 in gross equity before accounting for paydown.

The risk to the 5-year model is straightforward: rent softness. If actual rents run 10% below the $2,955 estimate, monthly cash flow compresses to roughly $440, and the cash-flow component of the 5-year ROI drops accordingly. The appreciation and paydown components remain intact regardless of rental performance, which is why the 1.5 DSCR matters — it's the buffer between a strong return and a break-even one.

Of the three return levers, cash flow is the one investors can stress-test at acquisition; appreciation and paydown accrue regardless of near-term rental market conditions.

How it compares to nearby for-sale listings

Five active 1-bedroom listings in the 90740 zip provide a direct pricing context, with a comp median of $255,000 against this property's $299,000 ask.

This property is priced 17% above the for-sale comp median of $255,000, but the size differential justifies a significant portion of that premium. At 720 square feet, this unit is 20% larger than the three comps listed at 600 square feet. On a price-per-square-foot basis, this property comes in at roughly $415/sqft — comparable to the $548/sqft implied by the $329,000 listing at 600 sqft, and below the $732/sqft implied by the $439,000 listing at 729 sqft.

Days on market tells a useful story. Four of the five comps have been listed for six days or fewer, suggesting fresh inventory. This property's 31 days on market — combined with the $16,000 price reduction — positions it as a seller who has already done the price discovery work. Buyers negotiating today are starting from a reduced basis, not an aspirational one.

The $199,999 listing at 800 square feet is the outlier worth watching. It's larger and cheaper, which could attract buyers cross-shopping on raw square footage. The distinction is whether that unit carries similar HOA fees and amenities — factors that don't appear in list price alone but drive the actual monthly cost of ownership and, by extension, the investor's net yield.

Rental demand in this zip

No active rental comps were identified in the 90740 zip for 1-bedroom units, which limits direct validation of the $2,955 monthly rent estimate.

The absence of rental comp data in the 90740 zip is itself a data point. It could reflect low turnover — tenants staying put in a market with limited rental inventory — or it could reflect a thin rental market where demand is concentrated in owner-occupied units. Either interpretation affects how confidently an investor should underwrite the $2,955 rent figure.

The estimated rent of $2,955 per month implies a rent-to-price ratio of roughly 0.99% — slightly below the 1% rule of thumb but well above what most coastal California markets produce. For context, achieving $2,955 on a 720-square-foot unit requires approximately $4.10 per square foot per month, which is achievable in coastal Orange County for well-positioned, move-in-ready units with in-unit laundry.

The in-unit washer and dryer, central air via heat pump, and the barn-door flex space are the features most likely to support the upper range of the rent estimate. Tenants paying near $3,000 per month in a 1-bedroom unit expect those amenities as baseline. The listing's description of the unit as move-in ready reduces the timeline between acquisition and first rent collection, which matters for cash-flow underwriting.

Conservative investors should model a 5-10% rent haircut — roughly $2,660 to $2,807 per month — to stress-test the cash-flow projection before committing to the purchase price.

Who this property suits + risks to weigh

This property fits a cash-flow-oriented investor comfortable with HOA-heavy condo structures and a coastal market where positive yield is uncommon.

Best fit

An investor seeking immediate income rather than a pure appreciation play will find the math here more compelling than most alternatives in Seal Beach. The 14.7% cash-on-cash return and $735 monthly cash flow are real numbers at current financing rates — not projections dependent on rent growth or cap rate compression. The non-owner-occupied status suggests the unit has been rented before, reducing the operational unknowns. For a buyer deploying roughly $60,000 in down payment and closing costs, the annual cash-on-cash yield is difficult to replicate in this zip code.

Risks to weigh

The $588 monthly HOA is the deal's central vulnerability. HOA fees can increase, and special assessments on aging condo complexes can be significant. Before closing, a buyer should request the HOA's reserve study, financials, and meeting minutes to assess the likelihood of near-term fee increases or assessments. A $100-per-month HOA increase would reduce monthly cash flow from $735 to $635 — still positive, but the margin narrows.

The rent estimate lacks local comp support, which means the $2,955 figure carries more uncertainty than a market with dense rental turnover. If the unit sits vacant for 30 days between tenants, that's roughly $2,955 in lost income that erases four months of cash flow. Factoring a 5% annual vacancy rate into the underwriting is prudent.

The price reduction and 31 days on market are mild caution flags — not red flags. They suggest the property isn't flying off the shelf, which gives a buyer negotiating leverage but also warrants asking why. The answer may simply be the HOA fee deterring owner-occupants, which is exactly the dynamic that creates yield for investors.